UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2017
OR
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ________ to ________
Commission File Number 0-33203
LANDMARK BANCORP, INC.
(Exact name of registrant as specified in its charter)
Delaware | 43-1930755 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
701 Poyntz Avenue, Manhattan, Kansas 66502 | ||
(Address of principal executive offices) (Zip code) |
(785) 565-2000 | ||
(Registrant's telephone number, including area code) |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ¨ | Accelerated filer ¨ | Non-accelerated filer ¨ (Do not check if a smaller reporting company) |
Smaller reporting company x | Emerging growth company ¨ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date: as of May 4, 2017, the issuer had outstanding 3,869,922 shares of its common stock, $0.01 par value per share.
LANDMARK BANCORP, INC.
Form 10-Q Quarterly Report
Table of Contents
Page Number | ||
PART I | ||
Item 1. | Financial Statements | 2 - 25 |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 26 – 33 |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 33 – 34 |
Item 4. | Controls and Procedures | 35 |
PART II | ||
Item 1. | Legal Proceedings | 36 |
Item 1A. | Risk Factors | 36 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 36 |
Item 3. | Defaults Upon Senior Securities | 36 |
Item 4. | Mine Safety Disclosures | 36 |
Item 5. | Other Information | 36 |
Item 6. | Exhibits | 36 |
Signature Page | 37 |
1 |
PART I – FINANCIAL INFORMATION
LANDMARK BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts) | March 31, | December 31, | ||||||
2017 | 2016 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Cash and cash equivalents | $ | 20,062 | $ | 19,996 | ||||
Investment securities available-for-sale, at fair value | 396,920 | 385,563 | ||||||
Bank stocks, at cost | 5,323 | 5,299 | ||||||
Loans, net of allowance for loans losses of $5,327 at March 31, 2017 and $5,344 at December 31, 2016 | 417,955 | 420,461 | ||||||
Loans held for sale, at fair value | 8,588 | 5,517 | ||||||
Premises and equipment, net | 20,156 | 20,407 | ||||||
Bank owned life insurance | 18,431 | 18,314 | ||||||
Goodwill | 17,532 | 17,532 | ||||||
Other intangible assets, net | 3,849 | 3,986 | ||||||
Real estate owned, net | 1,003 | 1,279 | ||||||
Accrued interest and other assets | 13,198 | 13,028 | ||||||
Total assets | $ | 923,017 | $ | 911,382 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Liabilities: | ||||||||
Deposits: | ||||||||
Non-interest-bearing demand | $ | 167,590 | $ | 152,012 | ||||
Money market and checking | 352,608 | 361,398 | ||||||
Savings | 93,291 | 88,273 | ||||||
Time | 139,197 | 139,838 | ||||||
Total deposits | 752,686 | 741,521 | ||||||
Federal Home Loan Bank borrowings | 33,450 | 39,100 | ||||||
Subordinated debentures | 21,334 | 21,284 | ||||||
Other borrowings | 13,491 | 12,483 | ||||||
Accrued interest, taxes, and other liabilities | 15,387 | 12,043 | ||||||
Total liabilities | 836,348 | 826,431 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.01 par value per share, 200,000 shares authorized; none issued | - | - | ||||||
Common stock, $0.01 par value per share, 7,500,000 shares authorized; 3,869,922 and 3,868,077 shares issued at March 31, 2017 and December 31, 2016, respectively | 39 | 38 | ||||||
Additional paid-in capital | 52,025 | 51,968 | ||||||
Retained earnings | 35,724 | 34,293 | ||||||
Accumulated other comprehensive loss | (1,119 | ) | (1,348 | ) | ||||
Total stockholders’ equity | 86,669 | 84,951 | ||||||
Total liabilities and stockholders’ equity | $ | 923,017 | $ | 911,382 |
See accompanying notes to consolidated financial statements.
2 |
LANDMARK BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
Three months ended | ||||||||
(Dollars in thousands, except per share amounts) | March 31, | |||||||
2017 | 2016 | |||||||
Interest income: | ||||||||
Loans: | ||||||||
Taxable | $ | 5,019 | $ | 5,136 | ||||
Tax-exempt | 35 | 66 | ||||||
Investment securities: | ||||||||
Taxable | 1,192 | 1,163 | ||||||
Tax-exempt | 942 | 809 | ||||||
Total interest income | 7,188 | 7,174 | ||||||
Interest expense: | ||||||||
Deposits | 338 | 277 | ||||||
Borrowings | 482 | 493 | ||||||
Total interest expense | 820 | 770 | ||||||
Net interest income | 6,368 | 6,404 | ||||||
Provision for loan losses | 50 | 50 | ||||||
Net interest income after provision for loan losses | 6,318 | 6,354 | ||||||
Non-interest income: | ||||||||
Fees and service charges | 1,715 | 1,729 | ||||||
Gains on sales of loans, net | 1,389 | 1,794 | ||||||
Bank owned life insurance | 117 | 120 | ||||||
Gains on sales of investment securities, net | 147 | 12 | ||||||
Other | 273 | 239 | ||||||
Total non-interest income | 3,641 | 3,894 | ||||||
Non-interest expense: | ||||||||
Compensation and benefits | 3,757 | 3,801 | ||||||
Occupancy and equipment | 1,024 | 1,056 | ||||||
Data processing | 330 | 311 | ||||||
Amortization of intangibles | 298 | 337 | ||||||
Professional fees | 290 | 219 | ||||||
Advertising | 166 | 166 | ||||||
Federal deposit insurance premiums | 72 | 110 | ||||||
Foreclosure and real estate owned expense | 52 | 65 | ||||||
Other | 1,072 | 1,097 | ||||||
Total non-interest expense | 7,061 | 7,162 | ||||||
Earnings before income taxes | 2,898 | 3,086 | ||||||
Income tax expense (1) | 693 | 693 | ||||||
Net earnings (1) | $ | 2,205 | $ | 2,393 | ||||
Earnings per share: | ||||||||
Basic (2) | $ | 0.57 | $ | 0.64 | ||||
Diluted (1)(2) | $ | 0.56 | $ | 0.63 | ||||
Dividends per share (2) | $ | 0.20 | $ | 0.19 |
(1) | Income tax expense, net earnings and diluted earnings per share for the period ended March 31, 2016 have been recast to reflect the early adoption of Accounting Standards Update ("ASU") 2016-09. |
(2) | Per share amounts for the period ended March 31, 2016 have been adjusted to give effect to the 5% stock dividend paid during December 2016. |
See accompanying notes to consolidated financial statements.
3 |
LANDMARK BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
Three months ended | ||||||||
(Dollars in thousands) | March 31, | |||||||
2017 | 2016 | |||||||
Net earnings (1) | $ | 2,205 | $ | 2,393 | ||||
Net unrealized holding gains on available-for-sale securities | 522 | 3,390 | ||||||
Less reclassification adjustment for net gains included in earnings | (147 | ) | (12 | ) | ||||
Net unrealized gains | 375 | 3,378 | ||||||
Income tax effect on net gains included in earnings | 54 | 4 | ||||||
Income tax effect on net unrealized holding gains | (200 | ) | (1,257 | ) | ||||
Other comprehensive income | 229 | 2,125 | ||||||
Total comprehensive income | $ | 2,434 | $ | 4,518 |
(1) | Net earnings for the period ended March 31, 2016 have been recast to reflect the early adoption of ASU 2016-09. |
See accompanying notes to consolidated financial statements.
4 |
LANDMARK BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
(Dollars in thousands, except per share amounts) | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | Total | |||||||||||||||
Balance at January 1, 2016 | $ | 35 | $ | 45,372 | $ | 32,988 | $ | 2,175 | $ | 80,570 | ||||||||||
Net earnings (1) | - | - | 2,393 | - | 2,393 | |||||||||||||||
Other comprehensive income | - | - | - | 2,125 | 2,125 | |||||||||||||||
Dividends paid ($0.19 per share) | - | - | (713 | ) | - | (713 | ) | |||||||||||||
Exercise of stock options, 49,790 shares(1) | 1 | 824 | - | - | 825 | |||||||||||||||
Balance at March 31, 2016 | $ | 36 | $ | 46,196 | $ | 34,668 | $ | 4,300 | $ | 85,200 | ||||||||||
Balance at January 1, 2017 | $ | 38 | $ | 51,968 | $ | 34,293 | $ | (1,348 | ) | $ | 84,951 | |||||||||
Net earnings | - | - | 2,205 | - | 2,205 | |||||||||||||||
Other comprehensive income | - | - | - | 229 | 229 | |||||||||||||||
Dividends paid ($0.20 per share) | - | - | (774 | ) | - | (774 | ) | |||||||||||||
Stock-based compensation | - | 35 | - | - | 35 | |||||||||||||||
Exercise of stock options, 1,845 shares, | 1 | 22 | - | - | 23 | |||||||||||||||
Balance at March 31, 2017 | $ | 39 | $ | 52,025 | $ | 35,724 | $ | (1,119 | ) | $ | 86,669 |
(1) | Net earnings and exercise of stock options for the period ended March 31, 2016 have been recast to reflect the early adoption of ASU 2016-09. |
See accompanying notes to consolidated financial statements.
5 |
LANDMARK BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended | ||||||||
(Dollars in thousands) | March 31, | |||||||
2017 | 2016 | |||||||
Cash flows from operating activities: | ||||||||
Net earnings (1) | $ | 2,205 | $ | 2,393 | ||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||
Provision for loan losses | 50 | 50 | ||||||
Valuation allowance on real estate owned | 33 | - | ||||||
Amortization of investment security premiums, net | 468 | 382 | ||||||
Amortization of purchase accounting adjustment on loans | (19 | ) | (2 | ) | ||||
Amortization of purchase accounting adjustment on subordinated debentures | 50 | 50 | ||||||
Amortization of intangibles | 298 | 337 | ||||||
Depreciation | 263 | 292 | ||||||
Increase in cash surrender value of bank owned life insurance | (117 | ) | (120 | ) | ||||
Stock-based compensation | 35 | - | ||||||
Deferred income taxes | 60 | 91 | ||||||
Net gains on sales of investment securities | (147 | ) | (12 | ) | ||||
Net losses on sales of foreclosed assets | 15 | 60 | ||||||
Net gains on sales of loans | (1,389 | ) | (1,794 | ) | ||||
Proceeds from sales of loans | 31,153 | 56,631 | ||||||
Origination of loans held for sale | (32,835 | ) | (53,795 | ) | ||||
Changes in assets and liabilities: | ||||||||
Accrued interest and other assets | (520 | ) | (1,423 | ) | ||||
Accrued expenses, taxes, and other liabilities | (99 | ) | (2,088 | ) | ||||
Net cash (used in) provided by operating activities | (496 | ) | 1,052 | |||||
Cash flows from investing activities: | ||||||||
Net decrease in loans | 2,452 | 9 | ||||||
Maturities and prepayments of investment securities | 11,069 | 10,790 | ||||||
Purchases of investment securities | (30,726 | ) | (22,634 | ) | ||||
Proceeds from sales of investment securities | 11,797 | 1,817 | ||||||
Redemption of bank stocks | 1,802 | 1,161 | ||||||
Purchase of bank stocks | (1,826 | ) | (801 | ) | ||||
Proceeds from sales of foreclosed assets | 233 | 630 | ||||||
Purchases of premises and equipment, net | (12 | ) | (178 | ) | ||||
Net cash used in investing activities | (5,211 | ) | (9,206 | ) | ||||
Cash flows from financing activities: | ||||||||
Net increase (decrease) in deposits | 11,166 | (6,333 | ) | |||||
Federal Home Loan Bank advance borrowings | 148,857 | 46,717 | ||||||
Federal Home Loan Bank advance repayments | (154,507 | ) | (37,206 | ) | ||||
Proceeds from other borrowings | 1,008 | 1,148 | ||||||
Proceeds from exercise of stock options (1) | 23 | 825 | ||||||
Payment of dividends | (774 | ) | (713 | ) | ||||
Net cash provided by financing activities | 5,773 | 4,438 | ||||||
Net increase (decrease) in cash and cash equivalents | 66 | (3,716 | ) | |||||
Cash and cash equivalents at beginning of period | 19,996 | 13,569 | ||||||
Cash and cash equivalents at end of period | $ | 20,062 | $ | 9,853 |
(Continued)
6 |
LANDMARK BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
(Unaudited)
Three months ended | ||||||||
(Dollars in thousands) | March 31, | |||||||
2017 | 2016 | |||||||
Supplemental disclosure of cash flow information: | ||||||||
Cash payments for income taxes | $ | - | $ | 500 | ||||
Cash paid for interest | 786 | 738 | ||||||
Supplemental schedule of noncash investing and financing activities: | ||||||||
Transfer of loans to real estate owned | 5 | - | ||||||
Investment securities purchases not yet settled | (3,443 | ) | (7,160 | ) |
(1) | Net earnings and proceeds from the exercise of stock options for the period ended March 31, 2016 have been recast to reflect the early adoption of ASU 2016-09. |
See accompanying notes to consolidated financial statements.
7 |
LANDMARK BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. | Interim Financial Statements |
The unaudited consolidated financial statements of Landmark Bancorp, Inc. (the “Company”) and its subsidiary, Landmark National Bank (the “Bank”) have been prepared in accordance with the instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements and should be read in conjunction with the Company’s most recent Annual Report on Form 10-K, containing the latest audited consolidated financial statements and notes thereto. The consolidated financial statements in this report have not been audited by an independent registered public accounting firm, but in the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation of financial statements have been reflected herein. The results of the three month interim period ended March 31, 2017 are not necessarily indicative of the results expected for the year ending December 31, 2017 or any other future time period. The Company has evaluated subsequent events for recognition and disclosure up to the date the financial statements were issued.
2. | Investments |
A summary of investment securities available-for-sale is as follows:
As of March 31, 2017 | ||||||||||||||||
Gross | Gross | |||||||||||||||
Amortized | unrealized | unrealized | Estimated | |||||||||||||
(Dollars in thousands) | cost | gains | losses | fair value | ||||||||||||
U. S. treasury securities | $ | 4,990 | $ | 8 | $ | - | $ | 4,998 | ||||||||
U. S. federal agency obligations | 21,419 | 44 | (40 | ) | 21,423 | |||||||||||
Municipal obligations, tax exempt | 176,646 | 893 | (2,389 | ) | 175,150 | |||||||||||
Municipal obligations, taxable | 67,954 | 468 | (257 | ) | 68,165 | |||||||||||
Agency mortgage-backed securities | 118,606 | 158 | (1,067 | ) | 117,697 | |||||||||||
Certificates of deposit | 8,724 | - | - | 8,724 | ||||||||||||
Common stocks | 376 | 387 | - | 763 | ||||||||||||
Total | $ | 398,715 | $ | 1,958 | $ | (3,753 | ) | $ | 396,920 |
As of December 31, 2016 | ||||||||||||||||
Gross | Gross | |||||||||||||||
Amortized | unrealized | unrealized | Estimated | |||||||||||||
(Dollars in thousands) | cost | gains | losses | fair value | ||||||||||||
U. S. treasury securities | $ | 6,005 | $ | 10 | $ | - | $ | 6,015 | ||||||||
U. S. federal agency obligations | 27,140 | 48 | (49 | ) | 27,139 | |||||||||||
Municipal obligations, tax exempt | 163,632 | 696 | (2,666 | ) | 161,662 | |||||||||||
Municipal obligations, taxable | 71,371 | 463 | (271 | ) | 71,563 | |||||||||||
Agency mortgage-backed securities | 109,427 | 171 | (1,222 | ) | 108,376 | |||||||||||
Certificates of deposit | 9,700 | - | - | 9,700 | ||||||||||||
Common stocks | 458 | 650 | - | 1,108 | ||||||||||||
Total | $ | 387,733 | $ | 2,038 | $ | (4,208 | ) | $ | 385,563 |
8 |
The tables above show that some of the securities in the available-for-sale investment portfolio had unrealized losses, or were temporarily impaired, as of March 31, 2017 and December 31, 2016. This temporary impairment represents the estimated amount of loss that would be realized if the securities were sold on the valuation date. Securities which were temporarily impaired are shown below, along with the length of time in a continuous unrealized loss position.
As of March 31, 2017 | ||||||||||||||||||||||||||||
(Dollars in thousands) | Less than 12 months | 12 months or longer | Total | |||||||||||||||||||||||||
No. of | Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||||||||||
securities | value | losses | value | losses | value | losses | ||||||||||||||||||||||
U.S. federal agency obligations | 9 | $ | 11,841 | $ | (40 | ) | $ | - | $ | - | $ | 11,841 | $ | (40 | ) | |||||||||||||
Municipal obligations, tax exempt | 237 | 95,197 | (2,389 | ) | - | - | 95,197 | (2,389 | ) | |||||||||||||||||||
Municipal obligations, taxable | 66 | 27,071 | (257 | ) | - | - | 27,071 | (257 | ) | |||||||||||||||||||
Agency mortgage-backed securities | 47 | 82,491 | (1,067 | ) | - | - | 82,491 | (1,067 | ) | |||||||||||||||||||
Total | 359 | $ | 216,600 | $ | (3,753 | ) | $ | - | $ | - | $ | 216,600 | $ | (3,753 | ) |
As of December 31, 2016 | ||||||||||||||||||||||||||||
(Dollars in thousands) | Less than 12 months | 12 months or longer | Total | |||||||||||||||||||||||||
No. of | Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||||||||||
securities | value | losses | value | losses | value | losses | ||||||||||||||||||||||
U. S. federal agency obligations | 9 | 15,056 | (49 | ) | - | - | 15,056 | $ | (49 | ) | ||||||||||||||||||
Municipal obligations, tax exempt | 275 | 97,842 | (2,666 | ) | - | - | 97,842 | $ | (2,666 | ) | ||||||||||||||||||
Municipal obligations, taxable | 66 | 26,184 | (271 | ) | - | - | 26,184 | $ | (271 | ) | ||||||||||||||||||
Agency mortgage-backed securities | 58 | 83,011 | (1,222 | ) | - | - | 83,011 | $ | (1,222 | ) | ||||||||||||||||||
Total | 408 | $ | 222,093 | $ | (4,208 | ) | $ | - | $ | - | $ | 222,093 | $ | (4,208 | ) |
The Company’s U.S. federal agency portfolio consists of securities issued by the government-sponsored agencies of Federal Home Loan Mortgage Corporation (“FHLMC”), Federal National Mortgage Association (“FNMA”) and Federal Home Loan Bank (“FHLB”). The receipt of principal and interest on U.S. federal agency obligations is guaranteed by the respective government-sponsored agency guarantor, such that the Company believes that its U.S. federal agency obligations do not expose the Company to credit-related losses. Based on these factors, along with the Company’s intent to not sell the securities and its belief that it was more likely than not that the Company will not be required to sell the securities before recovery of their cost basis, the Company believed that the U.S. federal agency obligations identified in the tables above were temporarily impaired as of the March 31, 2017 and December 31, 2016.
The Company’s portfolio of municipal obligations consists of both tax-exempt and taxable general obligations securities issued by various municipalities. As of March 31, 2017, the Company did not intend to sell and it is more likely than not that the Company will not be required to sell its municipal obligations in an unrealized loss position until the recovery of its cost. Due to the issuers’ continued satisfaction of the securities’ obligations in accordance with their contractual terms and the expectation that they will continue to do so, the evaluation of the fundamentals of the issuers’ financial condition and other objective evidence, the Company believed that the municipal obligations identified in the tables above were temporarily impaired as of the March 31, 2017 and December 31, 2016.
The Company’s agency mortgage-backed securities portfolio consists of securities underwritten to the standards of and guaranteed by the government-sponsored agencies of FHLMC, FNMA and the Government National Mortgage Association. The receipt of principal, at par, and interest on agency mortgage-backed securities is guaranteed by the respective government-sponsored agency guarantor, such that the Company believed that its agency mortgage-backed securities did not expose the Company to credit-related losses. Based on these factors, along with the Company’s intent to not sell the securities and the Company’s belief that it was more likely than not that the Company will not be required to sell the securities before recovery of their cost basis, the Company believed that the agency mortgage-backed securities identified in the tables above were temporarily impaired as of the March 31, 2017 and December 31, 2016.
9 |
The table below sets forth amortized cost and fair value of investment securities at March 31, 2017. The table includes scheduled principal payments and estimated prepayments, based on observable market inputs, for agency mortgage-backed securities. Actual maturities will differ from contractual maturities because borrowers have the right to prepay obligations with or without prepayment penalties. Securities with no maturity are listed separately.
(Dollars in thousands) | Amortized | Estimated | ||||||
cost | fair value | |||||||
Due in less than one year | $ | 29,722 | $ | 29,755 | ||||
Due after one year but within five years | 199,365 | 198,758 | ||||||
Due after five years but within ten years | 83,169 | 82,960 | ||||||
Due after ten years | 86,083 | 84,684 | ||||||
Common stocks | 376 | 763 | ||||||
Total | $ | 398,715 | $ | 396,920 |
Sales proceeds and gross realized gains and losses on sales of available-for-sale securities are as follows for the periods indicated:
(Dollars in thousands) | Three months ended March 31, | |||||||
2017 | 2016 | |||||||
Sales proceeds | $ | 11,797 | $ | 1,817 | ||||
Realized gains | $ | 171 | $ | 16 | ||||
Realized losses | (24 | ) | (4 | ) | ||||
Net realized gains | $ | 147 | $ | 12 |
Securities with carrying values of $217.5 million and $224.3 million were pledged to secure public funds on deposit, repurchase agreements and as collateral for borrowings at March 31, 2017 and December 31, 2016, respectively. Except for U.S. federal agency obligations, no investment in a single issuer exceeded 10% of consolidated stockholders’ equity.
3. | Loans and Allowance for Loan Losses |
Loans consisted of the following as of the dates indicated below:
March 31, | December 31, | |||||||
(Dollars in thousands) | 2017 | 2016 | ||||||
One-to-four family residential real estate | $ | 137,301 | $ | 136,846 | ||||
Construction and land | 16,329 | 13,738 | ||||||
Commercial real estate | 114,759 | 118,200 | ||||||
Commercial | 54,102 | 54,506 | ||||||
Agriculture | 76,124 | 78,324 | ||||||
Municipal | 3,706 | 3,884 | ||||||
Consumer | 21,088 | 20,271 | ||||||
Total gross loans | 423,409 | 425,769 | ||||||
Net deferred loan costs and loans in process | (127 | ) | 36 | |||||
Allowance for loan losses | (5,327 | ) | (5,344 | ) | ||||
Loans, net | $ | 417,955 | $ | 420,461 |
10 |
The following tables provide information on the Company’s allowance for loan losses by loan class and allowance methodology:
Three months ended March 31, 2017 | ||||||||||||||||||||||||||||||||
(Dollars in thousands) | One-to-four family residential real estate | Construction and land | Commercial real estate | Commercial | Agriculture | Municipal | Consumer | Total | ||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||||||
Balance at January 1, 2017 | $ | 504 | $ | 53 | $ | 1,777 | $ | 1,119 | $ | 1,684 | $ | 12 | $ | 195 | $ | 5,344 | ||||||||||||||||
Charge-offs | (19 | ) | - | - | - | - | - | (107 | ) | (126 | ) | |||||||||||||||||||||
Recoveries | 1 | - | - | 8 | 1 | - | 49 | 59 | ||||||||||||||||||||||||
Provision for loan losses | 7 | 18 | (37 | ) | (26 | ) | 46 | (1 | ) | 43 | 50 | |||||||||||||||||||||
Balance at March 31, 2017 | 493 | 71 | 1,740 | 1,101 | 1,731 | 11 | 180 | 5,327 |
Three months ended March 31, 2016 | ||||||||||||||||||||||||||||||||
(Dollars in thousands) | One-to-four family residential real estate | Construction and land | Commercial real estate | Commercial | Agriculture | Municipal | Consumer | Total | ||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||||||
Balance at January 1, 2016 | $ | 925 | $ | 77 | $ | 1,740 | $ | 1,530 | $ | 1,428 | $ | 23 | $ | 199 | $ | 5,922 | ||||||||||||||||
Charge-offs | - | - | - | - | - | - | (137 | ) | (137 | ) | ||||||||||||||||||||||
Recoveries | 2 | - | - | 19 | - | - | 13 | 34 | ||||||||||||||||||||||||
Provision for loan losses | (63 | ) | 5 | 91 | (165 | ) | 55 | 1 | 126 | 50 | ||||||||||||||||||||||
Balance at March 31, 2016 | 864 | 82 | 1,831 | 1,384 | 1,483 | 24 | 201 | 5,869 |
As of March 31, 2017 | ||||||||||||||||||||||||||||||||
(Dollars in thousands) | One-to-four family residential real estate | Construction and land | Commercial real estate | Commercial | Agriculture | Municipal | Consumer | Total | ||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||||||
Individually evaluated for loss | - | - | 106 | 70 | 132 | - | - | 308 | ||||||||||||||||||||||||
Collectively evaluated for loss | 493 | 71 | 1,634 | 1,031 | 1,599 | 11 | 180 | 5,019 | ||||||||||||||||||||||||
Total | 493 | 71 | 1,740 | 1,101 | 1,731 | 11 | 180 | 5,327 | ||||||||||||||||||||||||
Loan balances: | ||||||||||||||||||||||||||||||||
Individually evaluated for loss | 665 | 1,851 | 2,437 | 320 | 983 | 221 | 39 | 6,516 | ||||||||||||||||||||||||
Collectively evaluated for loss | 136,636 | 14,478 | 112,322 | 53,782 | 75,141 | 3,485 | 21,049 | 416,893 | ||||||||||||||||||||||||
Total | $ | 137,301 | $ | 16,329 | $ | 114,759 | $ | 54,102 | $ | 76,124 | $ | 3,706 | $ | 21,088 | $ | 423,409 |
As of December 31, 2016 | ||||||||||||||||||||||||||||||||
(Dollars in thousands) | One-to-four family residential real estate | Construction and land | Commercial real estate | Commercial | Agriculture | Municipal | Consumer | Total | ||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||||||
Individually evaluated for loss | - | - | 81 | 87 | 89 | - | 17 | 274 | ||||||||||||||||||||||||
Collectively evaluated for loss | 504 | 53 | 1,696 | 1,032 | 1,595 | 12 | 178 | 5,070 | ||||||||||||||||||||||||
Total | 504 | 53 | 1,777 | 1,119 | 1,684 | 12 | 195 | 5,344 | ||||||||||||||||||||||||
Loan balances: | ||||||||||||||||||||||||||||||||
Individually evaluated for loss | 780 | 1,937 | 2,445 | 355 | 881 | 258 | 72 | 6,728 | ||||||||||||||||||||||||
Collectively evaluated for loss | 136,066 | 11,801 | 115,755 | 54,151 | 77,443 | 3,626 | 20,199 | 419,041 | ||||||||||||||||||||||||
Total | $ | 136,846 | $ | 13,738 | $ | 118,200 | $ | 54,506 | $ | 78,324 | $ | 3,884 | $ | 20,271 | $ | 425,769 |
11 |
The Company recorded net loan charge-offs of $67,000 during the first quarter of 2017 compared to net loan charge-offs of $103,000 during the first quarter of 2016.
The Company’s impaired loans decreased from $6.7 million at December 31, 2016 to $6.5 million at March 31, 2017. The difference between the unpaid contractual principal and the impaired loan balance is a result of charge-offs recorded against impaired loans. The difference in the Company’s non-accrual loan balances and impaired loan balances at March 31, 2017 and December 31, 2016, was related to troubled debt restructurings (“TDR”) that are current and accruing interest, but still classified as impaired. Interest income recognized on a cash basis was immaterial during the three months ended March 31, 2017 and 2016. The following tables present information on impaired loans:
(Dollars in thousands) | As of March 31, 2017 | |||||||||||||||||||||||||||
Unpaid contractual principal | Impaired loan balance | Impaired loans without an allowance | Impaired loans with an allowance | Related allowance recorded | Year-to- date average loan balance | Year-to- date interest income recognized | ||||||||||||||||||||||
One-to-four family residential real estate | $ | 665 | $ | 665 | $ | 665 | $ | - | $ | - | $ | 669 | $ | 2 | ||||||||||||||
Construction and land | 3,586 | 1,851 | 1,851 | - | - | 1,899 | 16 | |||||||||||||||||||||
Commercial real estate | 2,437 | 2,437 | 2,151 | 286 | 106 | 2,449 | 124 | |||||||||||||||||||||
Commercial | 320 | 320 | 29 | 291 | 70 | 332 | - | |||||||||||||||||||||
Agriculture | 1,198 | 983 | 102 | 881 | 132 | 996 | 1 | |||||||||||||||||||||
Municipal | 221 | 221 | 221 | - | - | 251 | 2 | |||||||||||||||||||||
Consumer | 39 | 39 | 39 | - | - | 39 | - | |||||||||||||||||||||
Total impaired loans | $ | 8,466 | $ | 6,516 | $ | 5,058 | $ | 1,458 | $ | 308 | $ | 6,635 | $ | 145 |
(Dollars in thousands) | As of December 31, 2016 | |||||||||||||||||||||||||||
Unpaid contractual principal | Impaired loan balance | Impaired loans without an allowance | Impaired loans with an allowance | Related allowance recorded | Year-to- date average loan balance | Year-to- date interest income recognized | ||||||||||||||||||||||
One-to-four family residential real estate | $ | 780 | $ | 780 | $ | 780 | $ | - | $ | - | $ | 798 | $ | 7 | ||||||||||||||
Construction and land | 3,672 | 1,937 | 1,937 | - | - | 2,068 | 72 | |||||||||||||||||||||
Commercial real estate | 2,445 | 2,445 | 2,145 | 300 | 81 | 2,587 | 505 | |||||||||||||||||||||
Commercial | 355 | 355 | 46 | 309 | 87 | 425 | 2 | |||||||||||||||||||||
Agriculture | 1,173 | 881 | 147 | 734 | 89 | 1,000 | 2 | |||||||||||||||||||||
Municipal | 258 | 258 | 258 | - | - | 418 | - | |||||||||||||||||||||
Consumer | 72 | 72 | 55 | 17 | 17 | 78 | 13 | |||||||||||||||||||||
Total impaired loans | $ | 8,755 | $ | 6,728 | $ | 5,368 | $ | 1,360 | $ | 274 | $ | 7,374 | $ | 601 |
12 |
The Company’s key credit quality indicator is a loan’s performance status, defined as accruing or non-accruing. Performing loans are considered to have a lower risk of loss. Non-accrual loans are those which the Company believes have a higher risk of loss. The accrual of interest on non-performing loans is discontinued at the time the loan is ninety days delinquent, unless the credit is well secured and in process of collection. Loans are placed on non-accrual or are charged off at an earlier date if collection of principal or interest is considered doubtful. There were no loans ninety days delinquent and accruing interest at March 31, 2017 or December 31, 2016. The following tables present information on the Company’s past due and non-accrual loans by loan class:
(Dollars in thousands) | As of March 31, 2017 | |||||||||||||||||||||||||||
30-59 days delinquent and accruing | 60-89 days delinquent and accruing | 90 days or more delinquent and accruing | Total past due loans accruing | Non-accrual loans | Total past due and non- accrual loans | Total loans not past due | ||||||||||||||||||||||
One-to-four family residential real estate | 334 | 92 | - | 426 | $ | 484 | $ | 910 | $ | 136,391 | ||||||||||||||||||
Construction and land | - | - | - | - | 595 | 595 | 15,734 | |||||||||||||||||||||
Commercial real estate | 260 | 69 | - | 329 | 286 | 615 | 114,144 | |||||||||||||||||||||
Commercial | 160 | 13 | - | 173 | 316 | 489 | 53,613 | |||||||||||||||||||||
Agriculture | 58 | 328 | - | 386 | 940 | 1,326 | 74,798 | |||||||||||||||||||||
Municipal | - | - | - | - | - | - | 3,706 | |||||||||||||||||||||
Consumer | 40 | 18 | - | 58 | 39 | 97 | 20,991 | |||||||||||||||||||||
Total | $ | 852 | $ | 520 | $ | - | $ | 1,372 | $ | 2,660 | $ | 4,032 | $ | 419,377 | ||||||||||||||
Percent of gross loans | 0.20 | % | 0.12 | % | 0.00 | % | 0.32 | % | 0.63 | % | 0.95 | % | 99.05 | % |
(Dollars in thousands) | As of December 31, 2016 | |||||||||||||||||||||||||||
30-59 days delinquent and accruing | 60-89 days delinquent and accruing | 90 days or more delinquent and accruing | Total past due loans accruing | Non-accrual loans | Total past due and non- accrual loans | Total loans not past due | ||||||||||||||||||||||
One-to-four family residential real estate | $ | 215 | $ | 388 | $ | - | $ | 603 | $ | 595 | $ | 1,198 | $ | 135,648 | ||||||||||||||
Construction and land | - | - | - | - | 599 | 599 | 13,139 | |||||||||||||||||||||
Commercial real estate | - | - | - | - | 300 | 300 | 117,900 | |||||||||||||||||||||
Commercial | 13 | 5 | - | 18 | 342 | 360 | 54,146 | |||||||||||||||||||||
Agriculture | 55 | - | - | 55 | 838 | 893 | 77,431 | |||||||||||||||||||||
Municipal | - | - | - | - | - | - | 3,884 | |||||||||||||||||||||
Consumer | 79 | 3 | - | 82 | 72 | 154 | 20,117 | |||||||||||||||||||||
Total | $ | 362 | $ | 396 | $ | - | $ | 758 | $ | 2,746 | $ | 3,504 | $ | 422,265 | ||||||||||||||
Percent of gross loans | 0.09 | % | 0.09 | % | 0.00 | % | 0.18 | % | 0.64 | % | 0.82 | % | 99.18 | % |
Under the original terms of the Company’s non-accrual loans, interest earned on such loans for the three months ended March 31, 2017 and 2016 would have increased interest income by $31,000 and $33,000, respectively. No interest income related to non-accrual loans was included in interest income for the three months ended March 31, 2017 and 2016.
The Company also categorizes loans into risk categories based on relevant information about the ability of the borrowers to service their debt, such as current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis. Nonclassified loans generally include those loans that are expected to be repaid in accordance with contractual loan terms. Classified loans are those that are assigned a special mention, substandard or doubtful risk rating using the following definitions:
Special Mention: Loans are currently protected by the current net worth and paying capacity of the obligor or of the collateral pledged but such protection is potentially weak. These loans constitute an undue and unwarranted credit risk, but not to the point of justifying a classification of substandard. The credit risk may be relatively minor, yet constitutes an unwarranted risk in light of the circumstances surrounding a specific asset.
Substandard: Loans are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged. Loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Loans are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.
13 |
Doubtful: Loans classified doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.
The following table provides information on the Company’s risk categories by loan class:
As of March 31, 2017 | As of December 31, 2016 | |||||||||||||||
(Dollars in thousands) | Nonclassified | Classified | Nonclassified | Classified | ||||||||||||
One-to-four family residential real estate | $ | 136,143 | $ | 1,158 | $ | 135,640 | $ | 1,206 | ||||||||
Construction and land | 15,734 | 595 | 13,138 | 600 | ||||||||||||
Commercial real estate | 108,527 | 6,232 | 111,641 | 6,559 | ||||||||||||
Commercial | 50,614 | 3,488 | 51,080 | 3,426 | ||||||||||||
Agriculture | 71,377 | 4,747 | 73,564 | 4,760 | ||||||||||||
Municipal | 3,706 | - | 3,884 | - | ||||||||||||
Consumer | 21,037 | 51 | 20,181 | 90 | ||||||||||||
Total | $ | 407,138 | $ | 16,271 | $ | 409,128 | $ | 16,641 |
At March 31, 2017, the Company had twelve loan relationships consisting of eighteen outstanding loans that were classified as TDRs. During the first three months of 2017, the Company classified a $11,000 commercial real estate loan as a TDR after extending the maturity of the loan and classified as a TDR a $15,000 agriculture loan extended to an existing loan relationship that was classified as a TDR in 2016. Since the loans were adequately secured, no charge-offs or impairments were recorded against the principal as of March 31, 2017. During the first quarter of 2016, a $44,000 agriculture loan relationship consisting of two loans was classified as a TDR after extending the maturity of the loans.
The Company evaluates each TDR individually and returns the loan to accrual status when a payment history is established after the restructuring and future payments are reasonably assured. There were no loans modified as TDRs for which there was a payment default within 12 months of modification as of March 31, 2017 and 2016. At March 31, 2017, there was a commitment of $84,000 to lend additional funds on one construction and land loan classified as a TDR. The Company did not record any charge-offs against loans classified as TDRs in the first quarter either of 2017 or 2016. A credit provision for loan losses of $13,000 related to TDRs was recorded in the three months ended March 31, 2017 compared to no provision in the same period of 2016. The Company had $67,000 and $80,000 allowance for loan losses recorded against loans classified as TDRs at March 31, 2017 and December 31, 2016, respectively.
The following table presents information on loans that are classified as TDRs:
(Dollars in thousands) | ||||||||||||||||||||||||
As of March 31, 2017 | As of December 31, 2016 | |||||||||||||||||||||||
Number of loans | Non-accrual balance | Accruing balance | Number of loans | Non-accrual balance | Accruing balance | |||||||||||||||||||
One-to-four family residential real estate | 2 | $ | - | $ | 181 | 2 | $ | - | $ | 185 | ||||||||||||||
Construction and land | 4 | 583 | 1,256 | 4 | 588 | 1,338 | ||||||||||||||||||
Commercial real estate | 4 | 50 | 2,151 | 3 | 64 | 2,145 | ||||||||||||||||||
Commercial | 1 | - | 3 | 2 | - | 13 | ||||||||||||||||||
Agriculture | 5 | 268 | 44 | 4 | 268 | 44 | ||||||||||||||||||
Municipal | 2 | - | 221 | 2 | - | 258 | ||||||||||||||||||
Total troubled debt restructurings | 18 | $ | 901 | $ | 3,856 | 17 | $ | 920 | $ | 3,983 |
14 |
4. | Goodwill and Other Intangible Assets |
The Company tests goodwill for impairment annually or more frequently if circumstances warrant. The Company’s annual step one impairment test as of December 31, 2016 concluded that its goodwill was not impaired. The Company concluded there were no triggering events during the first three months of 2017 that required an interim goodwill impairment test.
Lease intangible assets are amortized over the life of the lease. Core deposit intangible assets are amortized over the estimated useful life of ten years on an accelerated basis. Mortgage servicing rights are amortized over the estimated life of the mortgage loan serviced for others. A summary of the other intangible assets that continue to be subject to amortization is as follows:
(Dollars in thousands) | As of March 31, 2017 | |||||||||||
Gross carrying amount | Accumulated amortization | Net carrying amount | ||||||||||
Core deposit intangible assets | $ | 2,067 | $ | (1,201 | ) | $ | 866 | |||||
Lease intangible asset | 350 | (154 | ) | 196 | ||||||||
Mortgage servicing rights | 5,873 | (3,086 | ) | 2,787 | ||||||||
Total other intangible assets | $ | 8,290 | $ | (4,441 | ) | $ | 3,849 |
(Dollars in thousands) | As of December 31, 2016 | |||||||||||
Gross carrying amount | Accumulated amortization | Net carrying amount | ||||||||||
Core deposit intangible assets | $ | 2,067 | $ | (1,137 | ) | $ | 930 | |||||
Lease intangible asset | 350 | (143 | ) | 207 | ||||||||
Mortgage servicing rights | 5,788 | (2,939 | ) | 2,849 | ||||||||
Total other intangible assets | $ | 8,205 | $ | (4,219 | ) | $ | 3,986 |
The following sets forth estimated amortization expense for core deposit and lease intangible assets for the remainder of 2017 and in successive years ending December 31:
(Dollars in thousands) | Amortization | |||
expense | ||||
Remainder of 2017 | $ | 214 | ||
2018 | 252 | |||
2019 | 214 | |||
2020 | 177 | |||
2021 | 121 | |||
Thereafter | 84 | |||
Total | $ | 1,062 |
Mortgage loans serviced for others are not reported as assets. The following table provides information on the principal balances of mortgage loans serviced for others:
(Dollars in thousands) | March 31, | December 31, | ||||||
2017 | 2016 | |||||||
FHLMC | $ | 487,990 | $ | 483,356 | ||||
FHLB | 10,851 | 11,393 | ||||||
Total | $ | 498,841 | $ | 494,749 |
Custodial escrow balances maintained in connection with serviced loans were $7.2 million and $4.1 million at March 31, 2017 and December 31, 2016, respectively. Gross service fee income related to such loans was $319,000 and $300,000 for the three months ended March 31, 2017 and 2016, respectively, and is included in fees and service charges in the consolidated statements of earnings.
15 |
Activity for mortgage servicing rights is as follows:
Three months ended | ||||||||
(Dollars in thousands) | March 31, | |||||||
2017 | 2016 | |||||||
Mortgage servicing rights: | ||||||||
Balance at beginning of period | $ | 2,849 | $ | 2,840 | ||||
Additions | 161 | 221 | ||||||
Amortization | (223 | ) | (253 | ) | ||||
Balance at end of period | $ | 2,787 | $ | 2,808 |
The fair value of mortgage servicing rights was $5.4 million and $5.1 million at March 31, 2017 and December 31, 2016, respectively. Fair value at March 31, 2017 was determined using discount rates ranging from 9.50% to 9.51%; prepayment speeds ranging from 4.39% to 33.19%, depending on the stratification of the specific mortgage servicing right; and a weighted average default rate of 2.24%. Fair value at December 31, 2016 was determined using discount rates ranging from 9.50% to 9.51%, prepayment speeds ranging from 4.86% to 32.79%, depending on the stratification of the specific mortgage servicing right, and a weighted average default rate of 2.26%.
The Company had a mortgage repurchase reserve of $301,000 at both March 31, 2017 and December 31, 2016, which represents the Company’s best estimate of probable losses that the Company will incur related to the repurchase of one-to-four family residential real estate loans previously sold or to reimburse investors for credit losses incurred on loans previously sold where a breach of the contractual representations and warranties occurred. The Company did not incur any losses charged against the reserve or make any provisions to the reserve during the first three months of 2017 and 2016. The Company recovered $7,000 of losses against the mortgage repurchase reserve during three months ended March 31, 2016. As of March 31, 2017, the Company had one outstanding mortgage repurchase request and expects to incur a loss of approximately $70,000.
5. | Earnings per Share |
Basic earnings per share have been computed based upon the weighted average number of common shares outstanding during each period. Diluted earnings per share include the effect of all potential common shares outstanding during each period. The diluted earnings per share computations for the three months ended March 31, 2017 and 2016 include all unexercised stock options because no stock options were anti-dilutive as of such dates. The shares used in the calculation of basic and diluted earnings per share are shown below:
Three months ended | ||||||||
(Dollars in thousands, except per share amounts) | March 31, | |||||||
2017 | 2016 | |||||||
Net earnings (1) | $ | 2,205 | $ | 2,393 | ||||
Weighted average common shares outstanding - basic (2) | 3,869,799 | 3,734,638 | ||||||
Assumed exercise of stock options (1)(2) | 79,149 | 100,200 | ||||||
Weighted average common shares outstanding - diluted (1)(2) | 3,948,948 | 3,834,838 | ||||||
Net earnings per share (1)(2): | ||||||||
Basic | $ | 0.57 | $ | 0.64 | ||||
Diluted | $ | 0.56 | $ | 0.63 |
(1) Net earnings, diluted earnings per share and assumed exercise of stock options for the period ended March 31, 2016 have been recast to relect the early adoption of ASU 2016-09.
(2) Share and per share values for the period ended March 31, 2016 have been adjusted to give effect to the 5% stock dividend paid during December 2016.
16 |
6. | Repurchase Agreements |
The Company has overnight repurchase agreements with certain deposit customers whereby the Company uses investment securities as collateral for non-insured funds. These balances are accounted for as collateralized financing and included in other borrowings on the balance sheet. The following is a summary of the balances and collateral of the Company’s repurchase agreements:
As of March 31, 2017 | ||||||||||||||||||||
Overnight and | Greater | |||||||||||||||||||
Continuous | Up to 30 days | 30-90 days | than 90 days | Total | ||||||||||||||||
Repurchase agreements: | ||||||||||||||||||||
U.S. federal agency obligations | $ | 2,564 | $ | - | $ | - | $ | - | $ | 2,564 | ||||||||||
Agency mortgage-backed securities | 10,927 | - | - | - | 10,927 | |||||||||||||||
Total | $ | 13,491 | $ | - | $ | - | $ | - | $ | 13,491 |
As of December 31, 2016 | ||||||||||||||||||||
Overnight and | Up to | Greater | ||||||||||||||||||
Continuous | 30 days | 30-90 days | than 90 days | Total | ||||||||||||||||
Repurchase agreements: | ||||||||||||||||||||
U.S. federal agency obligations | $ | 5,007 | $ | - | $ | - | $ | - | $ | 5,007 | ||||||||||
Agency mortgage-backed securities | 7,476 | - | - | - | 7,476 | |||||||||||||||
Total | $ | 12,483 | $ | - | $ | - | $ | - | $ | 12,483 |
Repurchase agreements are comprised of non-insured customer funds, totaling $13.5 million at March 31, 2017 and $12.5 million at December 31, 2016, which were secured by $19.7 million and $15.7 million of the Company’s investment portfolio at the same dates, respectively.
The investment securities are held by a third party financial institution in the customer’s custodial account. The Company is required to maintain adequate collateral for each repurchase agreement. Changes in the fair value of the investment securities impact the amount of collateral required. If the Company were to default, the investment securities would be used to settle the repurchase agreement with the deposit customer.
7. | Fair Value of Financial Instruments and Fair Value Measurements |
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (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. There are three levels of inputs that may be used to measure fair values:
Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.
Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.
17 |
Fair value estimates of the Company’s financial instruments as of March 31, 2017 and December 31, 2016, including methods and assumptions utilized, are set forth below:
(Dollars in thousands) | As of March 31, 2017 | |||||||||||||||||||
Carrying | ||||||||||||||||||||
amount | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Financial assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 20,062 | $ | 20,062 | $ | - | $ | - | $ | 20,062 | ||||||||||
Investment securities available-for-sale | 396,920 | 5,761 | 391,159 | - | 396,920 | |||||||||||||||
Bank stocks, at cost | 5,323 | n/a | n/a | n/a | n/a | |||||||||||||||
Loans, net | 417,955 | - | - | 416,130 | 416,130 | |||||||||||||||
Loans held for sale | 8,588 | - | 8,588 | - | 8,588 | |||||||||||||||
Derivative financial instruments | 966 | - | 966 | - | 966 | |||||||||||||||
Accrued interest receivable | 3,874 | 16 | 2,067 | 1,791 | 3,874 | |||||||||||||||
Financial liabilities: | ||||||||||||||||||||
Non-maturity deposits | $ | (613,489 | ) | $ | (613,489 | ) | $ | - | $ | - | (613,489 | ) | ||||||||
Time deposits | (139,197 | ) | - | (137,820 | ) | - | (137,820 | ) | ||||||||||||
FHLB borrowings | (33,450 | ) | - | (33,967 | ) | - | (33,967 | ) | ||||||||||||
Subordinated debentures | (21,334 | ) | - | (18,731 | ) | - | (18,731 | ) | ||||||||||||
Other borrowings | (13,491 | ) | - | (13,491 | ) | - | (13,491 | ) | ||||||||||||
Derivative financial instruments | (154 | ) | - | (154 | ) | - | (154 | ) | ||||||||||||
Accrued interest payable | (253 | ) | - | (253 | ) | - | (253 | ) |
As of December 31, 2016 | ||||||||||||||||||||
Carrying | ||||||||||||||||||||
amount | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Financial assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 19,996 | $ | 19,996 | $ | - | $ | - | $ | 19,996 | ||||||||||
Investment securities available-for-sale | 385,563 | 7,123 | 378,440 | - | 385,563 | |||||||||||||||
Bank stocks, at cost | 5,299 | n/a | n/a | n/a | n/a | |||||||||||||||
Loans, net | 420,461 | - | - | 417,957 | 417,957 | |||||||||||||||
Loans held for sales | 5,517 | - | 5,517 | - | 5,517 | |||||||||||||||
Derivative financial instruments | 662 | - | 662 | - | 662 | |||||||||||||||
Accrued interest receivable | 4,240 | 21 | 2,104 | 2,115 | 4,240 | |||||||||||||||
Financial liabilities: | ||||||||||||||||||||
Non-maturity deposits | $ | (601,683 | ) | $ | (601,683 | ) | $ | - | $ | - | (601,683 | ) | ||||||||
Time deposits | (139,838 | ) | - | (138,623 | ) | - | (138,623 | ) | ||||||||||||
FHLB borrowings | (39,100 | ) | - | (35,695 | ) | - | (35,695 | ) | ||||||||||||
Subordinated debentures | (21,284 | ) | - | (18,608 | ) | - | (18,608 | ) | ||||||||||||
Other borrowings | (12,483 | ) | - | (12,483 | ) | - | (12,483 | ) | ||||||||||||
Accrued interest payable | (268 | ) | - | (268 | ) | - | (268 | ) |
Methods and Assumptions Utilized
The carrying amount of cash and cash equivalents is considered to approximate fair value.
The Company’s investment securities classified as available-for-sale include U.S. treasury securities, U.S. federal agency securities, municipal obligations, agency mortgage-backed securities, certificates of deposits and common stocks. Quoted exchange prices are available for the Company’s U.S treasury securities and common stock investments, which are classified as Level 1. U.S. federal agency securities and agency mortgage-backed obligations are priced utilizing industry-standard models that consider various assumptions, including time value, yield curves, volatility factors, prepayment speeds, default rates, loss severity, current market and contractual prices for the underlying financial instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. These measurements are classified as Level 2. Municipal securities are valued using a type of matrix, or grid, pricing in which securities are benchmarked against U.S. treasury rates based on credit rating. These model and matrix measurements are classified as Level 2 in the fair value hierarchy.
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It is not practical to determine the fair value of bank stocks due to restrictions placed on the transferability of FHLB and Federal Reserve Bank stock.
The estimated fair value of the Company’s loan portfolio is based on the segregation of loans by collateral type, interest terms, and maturities. The fair value is estimated based on discounting scheduled and estimated cash flows through maturity using an appropriate risk-adjusted yield curve to approximate current interest rates for each category. No adjustment was made to the interest rates for changes in credit risk of performing loans where there are no known credit concerns. Management segregates loans in appropriate risk categories. Management believes that the risk factor embedded in the interest rates along with the allowance for loan losses applicable to the performing loan portfolio results in a fair valuation of such loans. The fair values of impaired loans are generally based on market prices for similar assets determined through independent appraisals or discounted values of independent appraisals and brokers’ opinions of value. This method of estimating fair value does not incorporate the exit-price concept of fair value prescribed by ASC Topic 820 and is classified as Level 3.
Mortgage loans originated and intended for sale in the secondary market are carried at fair value. The mortgage loan valuations are based on quoted secondary market prices for similar loans and are classified as Level 2.
The carrying amount of accrued interest receivable and payable are considered to approximate fair value.
The estimated fair value of deposits with no stated maturity, such as non-interest-bearing demand deposits, savings, money market accounts, and checking accounts, is equal to the amount payable on demand. The fair value of interest-bearing time deposits is based on the discounted value of contractual cash flows of such deposits. The discount rate is tied to the FHLB yield curve plus an appropriate servicing spread. Fair value measurements based on discounted cash flows are classified as Level 2. These fair values do not incorporate the value of core deposit intangibles which may be associated with the deposit base.
The fair value of advances from the FHLB, subordinated debentures, and other borrowings is estimated using current yield curves for similar borrowings adjusted for the Company’s current credit spread and classified as Level 2.
The Company’s derivative financial instruments consist of interest rate lock commitments and corresponding forward sales contracts on mortgage loans held for sale. The fair values of these derivatives are based on quoted prices for similar loans in the secondary market. The market prices are adjusted by a factor, based on the Company’s historical data and its judgment about future economic trends, which considers the likelihood that a commitment will ultimately result in a closed loan. These instruments are classified as Level 2. The amounts are included in other assets or other liabilities on the consolidated balance sheets and gains on sale of loans, net in the consolidated statements of earnings.
Off-Balance-Sheet Financial Instruments
The fair value of letters of credit and commitments to extend credit is based on the fees currently charged to enter into similar agreements. The aggregate amount of these fees is not material.
Transfers
The Company did not transfer any assets or liabilities among levels during the three months ended March 31, 2017 or during the year ended December 31, 2016.
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Valuation Methods for Instruments Measured at Fair Value on a Recurring Basis
The following tables represent the Company’s financial instruments that are measured at fair value on a recurring basis at March 31, 2017 and December 31, 2016, allocated to the appropriate fair value hierarchy:
(Dollars in thousands) | As of March 31, 2017 | |||||||||||||||
Fair value hierarchy | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Available-for-sale investment securities: | ||||||||||||||||
U. S. treasury securities | $ | 4,998 | $ | 4,998 | $ | - | $ | - | ||||||||
U. S. federal agency obligations | 21,423 | - | 21,423 | - | ||||||||||||
Municipal obligations, tax exempt | 175,150 | - | 175,150 | - | ||||||||||||
Municipal obligations, taxable | 68,165 | - | 68,165 | - | ||||||||||||
Mortgage-backed securities | 117,697 | - | 117,697 | - | ||||||||||||
Common stocks | 763 | 763 | - | - | ||||||||||||
Certificates of deposit | 8,724 | - | 8,724 | - | ||||||||||||
Loans held for sale | 8,588 | - | 8,588 | - | ||||||||||||
Derivative financial instruments | 966 | - | 966 | - | ||||||||||||
Liabililty: | ||||||||||||||||
Derivative financial instruments | (154 | ) | - | (154 | ) | - |
(Dollars in thousands) | As of December 31, 2016 | |||||||||||||||
Fair value hierarchy | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Available-for-sale investment securities: | ||||||||||||||||
U. S. treasury securities | $ | 6,015 | $ | 6,015 | $ | - | $ | - | ||||||||
U. S. federal agency obligations | 27,139 | - | 27,139 | - | ||||||||||||
Municipal obligations, tax exempt | 161,662 | - | 161,662 | - | ||||||||||||
Municipal obligations, taxable | 71,563 | - | 71,563 | - | ||||||||||||
Agency mortgage-backed securities | 108,376 | - | 108,376 | - | ||||||||||||
Common stocks | 1,108 | 1,108 | - | - | ||||||||||||
Certificates of deposit | 9,700 | - | 9,700 | - | ||||||||||||
Loans held for sale | 5,517 | - | 5,517 | - | ||||||||||||
Derivative financial instruments | 662 | - | 662 | - |
Changes in the fair value of available-for-sale securities are included in other comprehensive income to the extent the changes are not considered other-than-temporary impairments. Other-than-temporary impairment tests are performed on a quarterly basis and any decline in the fair value of an individual security below its cost that is deemed to be other-than-temporary results in a write-down of that security’s cost basis.
The aggregate fair value, contractual balance (including accrued interest), and gain on loans held for sale were as follows:
As of | As of | |||||||
March 31, | December 31, | |||||||
(Dollars in thousands) | 2017 | 2016 | ||||||
Aggregate fair value | $ | 8,588 | $ | 5,517 | ||||
Contractual balance | 8,443 | 5,480 | ||||||
Gain | $ | 145 | $ | 37 |
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The total amount of gains from changes in fair value of loans held for sale included in earnings were as follows:
Three months ended | ||||||||
March 31, | ||||||||
(Dollars in thousands) | 2017 | 2016 | ||||||
Interest income | $ | 45 | $ | 105 | ||||
Change in fair value | 109 | 79 | ||||||
Total change in fair value | $ | 154 | $ | 184 |
Valuation Methods for Instruments Measured at Fair Value on a Nonrecurring Basis
The Company does not value its loan portfolio at fair value. Collateral-dependent impaired loans are generally carried at the lower of cost or fair value of the collateral, less estimated selling costs. Collateral values are determined based on appraisals performed by qualified licensed appraisers hired by the Company and then further adjusted if warranted based on relevant facts and circumstances. The appraisals may utilize a single valuation approach or a combination of approaches including the comparable sales and income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value. Impaired loans are reviewed and evaluated at least quarterly for additional impairment and adjusted accordingly, based on the same factors identified above. The carrying value of the Company’s impaired loans was $6.2 million and $6.5 million, with an allocated allowance of $308,000 and $274,000, at March 31, 2017 and December 31, 2016, respectively.
Real estate owned includes assets acquired through, or in lieu of, foreclosure and land previously acquired for expansion. Real estate owned is initially recorded at the fair value of the collateral less estimated selling costs. Subsequent valuations are updated periodically and are based upon independent appraisals, third party price opinions or internal pricing models. The appraisals may utilize a single valuation approach or a combination of approaches including the comparable sales and income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value. Real estate owned is reviewed and evaluated at least annually for additional impairment and adjusted accordingly, based on the same factors identified above.
The following tables represent the Company’s financial instruments that are measured at fair value on a non-recurring basis as of March 31, 2017 and December 31, 2016 allocated to the appropriate fair value hierarchy:
(Dollars in thousands) | ||||||||||||||||
As of March 31, 2017 | ||||||||||||||||
Fair value hierarchy | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Impaired loans: | ||||||||||||||||
Commercial real estate | $ | 180 | $ | - | $ | - | $ | 180 | ||||||||
Commercial | 221 | - | - | $ | 221 | |||||||||||
Agriculture | 749 | - | - | $ | 749 | |||||||||||
Real estate owned: | ||||||||||||||||
One-to-four family residential real estate | 329 | - | - | 329 |
As of December 31, 2016 | ||||||||||||||||
Fair value hierarchy | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Impaired loans: | ||||||||||||||||
Commercial real estate | $ | 219 | $ | - | $ | - | $ | 219 | ||||||||
Commercial | 222 | - | - | 222 | ||||||||||||
Agriculture | 645 | - | - | 645 | ||||||||||||
Real estate owned: | ||||||||||||||||
One-to-four family residential real estate | 142 | - | - | 142 |
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The following table presents quantitative information about Level 3 fair value measurements measured at fair value on a non-recurring basis as of March 31, 2017 and December 31, 2016.
(Dollars in thousands) | ||||||||||||
Fair value | Valuation technique | Unobservable inputs | Range | |||||||||
As of March 31, 2017 | ||||||||||||
Impaired loans: | ||||||||||||
Commercial real estate | $ | 180 | Sales comparison | Adjustment to appraised value | 0%-60% | |||||||
Commercial | 221 | Sales comparison | Adjustment to appraised value | 0%-80% | ||||||||
Agriculture | 749 | Sales comparison | Adjustment to appraised value | 8%-80% | ||||||||
Real estate owned: | ||||||||||||
One-to-four family residential real estate | 329 | Sales comparison | Adjustment to appraised value | 10 | % | |||||||
As of December 31, 2016 | ||||||||||||
Impaired loans: | ||||||||||||
Commercial real estate | $ | 219 | Sales comparison | Adjustment to appraised value | 2%-15% | |||||||
Commercial | 222 | Sales comparison | Adjustment to comparable sales | 7%-80% | ||||||||
Agriculture | 645 | Sales comparison | Adjustment to comparable sales | 8%-80% | ||||||||
Real estate owned: | ||||||||||||
One-to-four family residential real estate | 142 | Sales comparison | Adjustment to appraised value | 10 | % |
8. | Regulatory Capital Requirements |
Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Management believed that as of March 31, 2017, the Company and the Bank met all capital adequacy requirements to which they were subject at that time.
Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. The Company and the Bank are subject to the capital rules (the “Basel III Rules”) that implemented the Basel III regulatory capital reforms from the Basel Committee on Banking Supervision and certain changes required by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Basel III Rules are applicable to all U.S. banks that are subject to minimum capital requirements, as well as to bank and savings and loan holding companies other than “small bank holding companies” (generally, non-public bank holding companies with consolidated assets of less than $1.0 billion).
The Basel III Rules require a common equity Tier 1 capital to risk-weighted assets minimum ratio of 4.5%, a Tier 1 capital to risk-weighted assets minimum ratio of 6.0%, a Total Capital to risk-weighted assets minimum ratio of 8.0%, and a Tier 1 leverage minimum ratio of 4.0%. A capital conservation buffer, comprised of common equity Tier 1 capital, is also established above the regulatory minimum capital requirements. This capital conservation buffer began on January 1, 2016 at 0.625% of risk-weighted assets, was 1.25% effective on January 1, 2017, and will further increase each subsequent year by an additional 0.625% until reaching its final level of 2.5% on January 1, 2019. The capital conservation buffer increases the common equity Tier 1 capital ratio, Tier 1 capital and total risk based capital ratios as of March 31 of each year.
As of March 31, 2017 and December 31, 2016, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action then in effect. There are no conditions or events since that notification that management believes have changed the institution’s category.
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The following is a comparison of the Company’s regulatory capital to minimum capital requirements at March 31, 2017 and December 31, 2016:
(Dollars in thousands) | For capital | |||||||||||||||
Actual | adequacy purposes | |||||||||||||||
Amount | Ratio | Amount | Ratio (1) | |||||||||||||
As of March 31, 2017 | ||||||||||||||||
Leverage | $ | 90,260 | 10.05 | % | $ | 35,914 | 4.0 | % | ||||||||
Common Equity Tier 1 Capital | 69,609 | 13.49 | % | 29,672 | 5.8 | % | ||||||||||
Tier 1 Capital | 90,260 | 17.49 | % | 37,413 | 7.3 | % | ||||||||||
Total Risk Based Capital | 95,901 | 18.58 | % | 47,733 | 9.3 | % | ||||||||||
As of December 31, 2016 | ||||||||||||||||
Leverage | $ | 88,819 | 10.04 | % | $ | 35,370 | 4.0 | % | ||||||||
Common Equity Tier 1 Capital | 68,263 | 13.32 | % | 26,265 | 5.1 | % | ||||||||||
Tier 1 Capital | 88,819 | 17.33 | % | 33,952 | 6.6 | % | ||||||||||
Total Risk Based Capital | 94,596 | 18.46 | % | 44,201 | 8.6 | % |
(1) | The required ratios for capital adequacy purposes include a capital conservation buffer of 1.25% for March 31, 2017 and 0.625% for December 31, 2016. |
The following is a comparison of the Bank’s regulatory capital to minimum capital requirements at March 31, 2017 and December 31, 2016:
To be well-capitalized | ||||||||||||||||||||||||
under prompt | ||||||||||||||||||||||||
(Dollars in thousands) | For capital | corrective | ||||||||||||||||||||||
Actual | adequacy purposes | action provisions | ||||||||||||||||||||||
Amount | Ratio | Amount | Ratio(1) | Amount | Ratio | |||||||||||||||||||
As of March 31, 2017 | ||||||||||||||||||||||||
Leverage | $ | 89,262 | 9.97 | % | $ | 35,813 | 4.0 | % | $ | 44,766 | 5.0 | % | ||||||||||||
Common Equity Tier 1 Capital | 89,262 | 17.35 | % | 29,583 | 5.8 | % | 33,442 | 6.5 | % | |||||||||||||||
Tier 1 Capital | 89,262 | 17.35 | % | 37,301 | 7.3 | % | 41,159 | 8.0 | % | |||||||||||||||
Total Risk Based Capital | 94,729 | 18.41 | % | 47,591 | 9.3 | % | 51,449 | 10.0 | % | |||||||||||||||
As of December 31, 2016 | ||||||||||||||||||||||||
Leverage | $ | 88,076 | 9.98 | % | $ | 35,284 | 4.0 | % | $ | 44,105 | 5.0 | % | ||||||||||||
Common Equity Tier 1 Capital | 88,076 | 17.23 | % | 26,194 | 5.1 | % | 33,222 | 6.5 | % | |||||||||||||||
Tier 1 Capital | 88,076 | 17.23 | % | 33,861 | 6.6 | % | 40,888 | 8.0 | % | |||||||||||||||
Total Risk Based Capital | 93,560 | 18.31 | % | 44,083 | 8.6 | % | 51,110 | 10.0 | % |
(1) | The required ratios for capital adequacy purposes include a capital conservation buffer of 1.25% for March 31, 2017 and 0.625% for December 31, 2016. |
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9. | Impact of Recent Accounting Pronouncements |
In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The main provisions of the update require the identification of performance obligations within a contract and require the recognition of revenue based on a stand-alone allocation of contract revenue to each performance obligation. Performance obligations may be satisfied and revenue recognized over a period of time if: 1) the customer simultaneously receives and consumes the benefits provided by the entity’s performance as the entity performs, or 2) the entity’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced, or 3) the entity’s performance does not create an asset with an alternative use to the entity, and the entity has an enforceable right to payment for performance completed to date. For public entities the amendments of the update are effective for annual reporting periods beginning after December 15, 2017 including interim periods within that reporting periodThe Company’s revenue is primarily comprised of net interest income on financial asset and liabilities, which are excluded from the scope of ASU 2014-09. Management is still evaluating the impact of ASU 2014-09 on other non-interest income, but does not believe the adoption of ASU 2014-09 will have a material impact on the Company’s financial position, results of operations or cash flows.
In January 2016, the FASB issued ASU 2016-01, Financial Instruments (Topic 825): Recognition and Measurement of Financial Assets and Liabilities. The main provisions of the update are to eliminate the available for sale classification of accounting for equity securities and to adjust the fair value disclosures for financial instruments carried at amortized costs such that the disclosed fair values represent an exit price as opposed to an entry price. The provisions of this update will require that equity securities be carried at fair market value on the balance sheet and any periodic changes in value will be adjustments to the income statement. A practical expedient is provided for equity securities without a readily determinable fair value, such that these securities can be carried at cost less any impairment. The provisions of this update become effective for interim and annual periods beginning after December 15, 2017. Upon the effective date of the update, changes in the value of the Company's common stock investments will be adjustments to the income statement. Management has concluded that the remaining requirements of this update are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.
In February 2016, the FASB issued an update (ASU No. 2016-02, Leases) creating FASB Topic 842, Leases. The guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and requiring more disclosures related to leasing transactions. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. Management has concluded that based on the Company’s current operating leases, the adoption of ASU 2016-02 will not have a material impact on the Company’s consolidated financial statement and related disclosures.
In March 2016, the FASB issued an update, ASU No. 2016-09, Stock Compensation: Improvements to Employee Share-Based Payment Accounting. The guidance in this update affects any entity that issues share-based payment awards including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flow. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early adoption was permitted. The Company elected to adopt ASU 2016-09 in 2016. As a result of this election, income tax expense decreased by $308,000 during 2016 as a result of recognized excess tax benefits from the exercise of stock options. The presentation of excess tax benefits from the exercise of stock options have been presented on a prospective basis and are included in changes in accrued interest and other assets in the operating activities section of the statement of cash flows. The Company’s excess tax benefits from the exercise of stock options totaled $12,000 in the first quarter of 2017 and $116,000 in the first quarter of 2016.
24 |
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), commonly referred to as “CECL.” The provisions of the update eliminate the probable initial recognition threshold under current GAAP which requires reserves to be based on an incurred loss methodology. Under CECL, reserves required for financial assets measured at amortized cost will reflect an organization’s estimate of all expected credit losses over the expected term of the financial asset and thereby require the use of reasonable and supportable forecasts to estimate future credit losses. Because CECL encompasses all financial assets carried at amortized cost, the requirement that reserves be established based on an organization’s reasonable and supportable estimate of expected credit losses extends to held to maturity debt securities. Under the provisions of the update, credit losses recognized on available for sale debt securities will be presented as an allowance as opposed to a write-down. In addition, CECL will modify the accounting for purchased loans, with credit deterioration since origination, so that reserves are established at the date of acquisition for purchased loans. Under current GAAP a purchased loan’s contractual balance is adjusted to fair value through a credit discount and no reserve is recorded on the purchased loan upon acquisition. Since under CECL reserves will be established for purchased loans at the time of acquisition, the accounting for purchased loans is made more comparable to the accounting for originated loans. Finally, increased disclosure requirements under CECL oblige organizations to present the currently required credit quality disclosures disaggregated by the year of origination or vintage. FASB expects that the evaluation of underwriting standards and credit quality trends by financial statement users will be enhanced with the additional vintage disclosures. For public entities, the amendments of the update are effective beginning January 1, 2020. Management has initiated an implementation committee to assist in assessing data and system needs for the new standard. Management anticipates the effect will be an increase to the allowance for loan losses upon adoption. However, the size of the overall increase is uncertain at this time.
In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Payments (a consensus of Emerging Issues Task Force). This ASU attempts to clarify how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The purpose of this update is to reduce existing diversity in practice in eight areas addressed by the update. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted. Management has concluded that the adoption of ASU 2016-15 will not have a material impact on the Company’s consolidated financial statements and related disclosures.
In March 2017, the FASB issued ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The provisions of this update become effective for interim and annual periods beginning after December 15, 2018. Management has concluded that based on the Company’s current portfolio of investment securities that the adoption of these amendments will result in shorter amortization period for investment security premiums, which will initially result in lower interest income on investment securities.
25 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview. Landmark Bancorp, Inc. is a one-bank holding company incorporated under the laws of the State of Delaware and is engaged in the banking business through its wholly-owned subsidiary, Landmark National Bank. References to the “Company,” “we,” “us,” and “our” refer collectively to Landmark Bancorp, Inc. and Landmark National Bank. The Company is listed on the Nasdaq Global Market under the symbol “LARK.” The Bank is dedicated to providing quality financial and banking services to its local communities. Our strategy includes continuing a tradition of holding and acquiring quality assets while growing our commercial, commercial real estate and agriculture loan portfolios. We are committed to developing relationships with our borrowers and providing a total banking service.
The Bank is principally engaged in the business of attracting deposits from the general public and using such deposits, together with borrowings and other funds, to originate one-to-four family residential real estate, construction and land, commercial real estate, commercial, agriculture, municipal and consumer loans. Although not our primary business function, we do invest in certain investment and mortgage-related securities using deposits and other borrowings as funding sources.
Our results of operations depend generally on net interest income, which is the difference between interest income from interest-earning assets and interest expense on interest-bearing liabilities. Net interest income is affected by regulatory, economic and competitive factors that influence interest rates, loan demand and deposit flows. In addition, we are subject to interest rate risk to the degree that our interest-earning assets mature or reprice at different times, or at different speeds, than our interest-bearing liabilities. Our results of operations are also affected by non-interest income, such as service charges, loan fees and gains from the sale of newly originated loans and gains or losses on investments. Our principal operating expenses, aside from interest expense, consist of compensation and employee benefits, occupancy costs, professional fees, federal deposit insurance costs, data processing expenses, amortization of intangibles, advertising expenses, foreclosure and real estate owned expense and provision for loan losses.
We are significantly impacted by prevailing economic conditions, including federal monetary and fiscal policies, and federal regulations of financial institutions. Deposit balances are influenced by numerous factors such as competing investments, the level of income and the personal rate of savings within our market areas. Factors influencing lending activities include the demand for housing and the interest rate pricing competition from other lending institutions.
Currently, our business consists of ownership of the Bank, with its main office in Manhattan, Kansas and twenty eight additional branch offices in central, eastern, southeast and southwest Kansas.
Critical Accounting Policies. Critical accounting policies are those which are both most important to the portrayal of our financial condition and results of operations and require our management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies relate to the allowance for loan losses, the valuation of investment securities, accounting for income taxes and the accounting for goodwill and other intangible assets, all of which involve significant judgment by our management. Information about our critical accounting policies is included under Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2016.
Summary of Results. During the first quarter of 2017, we recorded net earnings of $2.2 million, which was a decrease of $188,000 from the $2.4 million of net earnings in the first quarter of 2016.
26 |
The following table summarizes earnings and key performance measures for the periods presented:
(Dollars in thousands, except per share amounts) | Three months ended March 31, | |||||||
2017 | 2016 | |||||||
Net earnings: | ||||||||
Net earnings (1) | $ | 2,205 | $ | 2,393 | ||||
Basic earnings per share (2) | $ | 0.57 | $ | 0.64 | ||||
Diluted earnings per share (1)(2) | $ | 0.56 | $ | 0.63 | ||||
Earnings ratios: | ||||||||
Return on average assets (1)(2) | 0.98 | % | 1.10 | % | ||||
Return on average equity (1)(2) | 10.46 | % | 11.60 | % | ||||
Equity to total assets | 9.39 | % | 9.55 | % | ||||
Net interest margin (3) (4) | 3.38 | % | 3.47 | % | ||||
Dividend payout ratio | 35.71 | % | 32.26 | % |
(1) | Net earnings, diluted earnings per share, return on average assets and return on average equity for the period ended March 31, 2016 have been recaset to reflect the early adoption of ASU 2016-09. |
(2) | Per share values for the period ended March 31, 2016 have been adjusted to give effect to the 5% stock dividend paid during December 2016. |
(3) | Ratios have been annualized and are not necessarily indicative of the results for the entire year. |
(4) | Net interest margin is presented on a fully tax equivalent basis, using a 34% federal tax rate. |
Interest Income. Interest income of $7.2 million for the quarter ended March 31, 2017 was unchanged as compared to the same period of 2016. Interest income on loans decreased $148,000, or 2.8%, to $5.1 million for the quarter ended March 31, 2017, compared to the same period of 2016 due primarily to a decrease in our average loan balances, which decreased from $426.0 million in the first quarter of 2016 to $420.5 million in the first quarter of 2017. Also contributing to the decrease in interest income were lower yields on loans, which decreased from 4.94% in the first quarter of 2016 to 4.89% in the first quarter of 2017. Interest income on investment securities increased $162,000, or 8.2%, to $2.1 million for the first quarter of 2017, as compared to $2.0 million in the same period of 2016. The increase in interest income on investment securities was primarily the result of an increase in our average balance of investment securities from $359.1 million during the first quarter of 2016 to $393.5 million during the first quarter of 2017. Also contributing to the higher interest income on investment securities was an increase in our tax equivalent yield on investment securities, which increased from 2.65% in the first quarter of 2016 to 2.66% during the first quarter of 2017.
Interest Expense. Interest expense during the quarter ended March 31, 2017 increased $50,000, or 6.5%, to $820,000 as compared to the same period of 2016. Interest expense on interest-bearing deposits increased $61,000, or 22.2%, to $338,000 for the quarter ended March 31, 2017 as compared to the quarter ended March 31, 2016. The increase in interest expense on interest-bearing deposits was the result of deposits repricing higher and an increase in average interest-bearing deposit balances, which increased from $561.4 million in the first quarter of 2016 to $587.6 million in the first quarter of 2017. The average rate of interest-bearing deposits increased 0.03% for the first quarter of 2017 to 0.23% as compared to 0.20% in the same period of 2016. For the first quarter of 2017, interest expense on borrowings decreased $11,000, or 2.2%, to $482,000 as compared to the same period of 2016, due primarily to a decrease in our average outstanding borrowings, which decreased from $72.4 million in the first quarter of 2016 to $71.7 million in the same period of 2017. Also contributing to the lower interest expense on borrowings were lower average rates on our borrowings which decreased by 0.02% for the first quarter of 2017 compared to the same period of 2016.
Net Interest Income. Net interest income decreased $36,000, or 0.6%, to $6.4 million for the first quarter of 2017 compared to the same period of 2016. Our net interest margin, on a tax-equivalent basis, decreased from 3.47% during the first quarter of 2016 to 3.38% in the same period of 2017. Lower average balances of loans were the primary driver of the decrease in our net interest income. Our net interest income and net interest margin may continue to decline if short-term interest rates continue to increase and we are unable to reprice our loans higher while our cost of interest-bearing deposits and borrowings increase.
See the Average Assets/Liabilities and Rate/Volume tables at the end of Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional details on asset yields, liability rates and net interest margin.
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Provision for Loan Losses. We maintain, and our Board of Directors monitors, an allowance for losses on loans. The allowance is established based upon management's periodic evaluation of known and inherent risks in the loan portfolio, review of significant individual loans and collateral, review of delinquent loans, past loss experience, adverse situations that may affect the borrowers’ ability to repay, current and expected market conditions, and other factors management deems important. Determining the appropriate level of reserves involves a high degree of management judgment and is based upon historical and projected losses in the loan portfolio and the collateral value or discounted cash flows of specifically identified impaired loans. Additionally, allowance policies are subject to periodic review and revision in response to a number of factors, including current market conditions, actual loss experience and management’s expectations.
During the first quarter of both 2017 and 2016, we recorded a provision for loan losses of $50,000. We recorded net loan charge-offs of $67,000 during the first quarter of 2017 compared to $103,000 during the first quarter of 2016.
For further discussion of the allowance for loan losses, refer to the “Asset Quality and Distribution” section below.
Non-interest Income. Total non-interest income was $3.6 million in the first quarter of 2017, a decrease of $253,000, or 6.5%, compared to the same period of 2016. The decrease in non-interest income was primarily the result of a decline in our gains on sales of loans of $405,000 as a result of decreased volumes of one-to-four family residential real estate loans originated and sold during the first quarter of 2017 compared to the same period of 2016. Partially offsetting the decline in gains on sales of loans was a $147,000 gain on sales of investment securities during the first quarter of 2017, compared to a gain of $12,000 in the same period of 2016.
Non-interest Expense. Non-interest expense decreased $101,000, or 1.4%, to $7.1 million for the first quarter of 2017 compared to the same period of 2016. The decrease in non-interest expense was primarily the result of decreases of $44,000 in compensation and benefits expense, $39,000 in amortization of intangibles, $38,000 in federal deposit insurance premiums, $32,000 in occupancy and equipment expense and $25,000 in other non interest expense. These decreases were partially offset by increases of $71,000 in professional fees and $19,000 in data processing fees. The decrease in compensation and benefits expenses and other non-interest expense was primarily related to lower volumes of one-to-four family residential real estate loans originated for sale and the expenses related thereto during the first quarter of 2017 compared to the first quarter of 2016. The decrease in amortization of intangibles was primarily due to slower prepayment on our mortgage loans serviced for others, while the decline in FDIC insurance premiums was due to lower premiums starting in the 3rd quarter of 2016. The increase in professional fees is due primarily to increased audit and compliance costs. The increase in data processing expense is due to adding additional services to our contract.
Income Tax Expense. During the first quarter of 2017, we recorded income tax expense of $693,000, compared to the same amount during the same period of 2016. The effective tax rate increased from 22.5% in the first quarter of 2016 to 23.9% in the first quarter of 2017 primarily as a result of a decrease in excess tax benefits from the exercise of stock options from $116,000 in the first quarter of 2016 to $12,000 in the same period of 2017. Income tax expense was recast for the first quarter of 2016 to reflect the early adoption of ASU 2016-09.
Financial Condition. Despite measured improvement in certain metrics, general uncertainty with respect to economic conditions in the United States continues to affect our asset quality and performance. The geographic markets in which the Company operates have also been impacted by an economic downturn in the agriculture sector. However, our loan portfolio is diversified across various types of loans and collateral throughout the markets in which we operate. Aside from a few problem loans that management is working to resolve, our asset quality has generally improved over the past few years. Aside from identified problem assets, management believes that the Company continues to have a high quality asset base and solid core earnings, and anticipates that its efforts to run a high quality financial institution with a sound asset base will continue to create a strong foundation for continued growth and profitability in the future.
Asset Quality and Distribution. Our primary investing activities are the origination of one-to-four family residential real estate, construction and land, commercial real estate, commercial, agriculture, municipal and consumer loans and the purchase of investment securities. Total assets increased to $923.0 million at March 31, 2017, compared to $911.4 million at December 31, 2016. The increase in our total assets was primarily the result of an increase in our investment securities, which increased from $385.6 million at December 31, 2016 to $396.9 million at March 31, 2017. Net loans, excluding loans held for sale, totaled $418.0 million at March 31, 2017 compared to $420.5 million at December 31, 2016.
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The allowance for loan losses is established through a provision for loan losses based on our evaluation of the risk inherent in the loan portfolio and changes in the nature and volume of our loan activity. This evaluation, which includes a review of all loans with respect to which full collectability may not be reasonably assured, considers the fair value of the underlying collateral, economic conditions, historical loan loss experience, level of classified loans and other factors that warrant recognition in providing for an appropriate allowance for loan losses. At March 31, 2017 and December 31, 2016, our allowance for loan losses totaled $5.3 million, or 1.26% of gross loans outstanding.
As of March 31, 2017 and December 31, 2016, approximately $16.3 million and $16.6 million, respectively, of loans were considered classified and assigned a risk rating of special mention, substandard or doubtful. These ratings indicate that these loans were identified as potential problem loans having more than normal risk which raised doubts as to the ability of the borrower to comply with present loan repayment terms. Even though borrowers were experiencing moderate cash flow problems as well as some deterioration in collateral value, management believed the general allowance was sufficient to cover the risks and probable incurred losses related to such loans at March 31, 2017 and December 31, 2016, respectively.
Loans past due 30-89 days and still accruing interest totaled $1.4 million, or 0.32% of gross loans, at March 31, 2017 compared to $758,000, or 0.18% of gross loans, at December 31, 2016. At March 31, 2017, $2.7 million in loans were on non-accrual status, or 0.63% of gross loans, compared to $2.7 million, or 0.64% of gross loans, at December 31, 2016. Non-accrual loans consist of loans 90 or more days past due and certain impaired loans. There were no loans 90 days delinquent and accruing interest at March 31, 2017 or December 31, 2016. Our impaired loans totaled $6.5 million at March 31, 2017 compared to $6.7 million at December 31, 2016. The difference in the Company’s non-accrual loan balances and impaired loan balances at March 31, 2017 was related to TDRs that were accruing interest but still classified as impaired.
At March 31, 2017, the Company had twelve loan relationships consisting of eighteen outstanding loans that were classified as TDRs. During the first three months of 2017, the Company classified a $11,000 commercial real estate loan as a TDR after extending the maturity of the loan and classified as a TDR a $15,000 agriculture loan extended to an existing loan relationship that was classified as a TDR in 2016. Since the loans were adequately secured, no charge-offs or impairments were recorded against the principal as of March 31, 2017. During the first quarter of 2016, a $44,000 agriculture loan relationship consisting of two loans was classified as a TDR after extending the maturity of the loans.
As part of our credit risk management, we continue to manage the loan portfolio to identify problem loans and have placed additional emphasis on commercial real estate and construction and land relationships. We are working to resolve the remaining problem credits or move the non-performing credits out of the loan portfolio. At March 31, 2017, we had $1.0 million of real estate owned compared to $1.3 million at December 31, 2016. As of March 31, 2017, real estate owned primarily consisted of a few residential real estate properties and one commercial property. The Company is currently marketing all of the remaining properties in real estate owned.
Liability Distribution. Our primary ongoing sources of funds are deposits, FHLB borrowings, proceeds from principal and interest payments on loans and investment securities and proceeds from the sale of mortgage loans and investment securities. While maturities and scheduled amortization of loans are a predictable source of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates and economic conditions. We experienced an increase of $11.2 million in total deposits during the first quarter of 2017, to $752.7 million at March 31, 2017, from $741.5 million at December 31, 2016. The increase in deposits was primarily due to increased balances in non-interest bearing and savings accounts. This increase was partially offset by lower balances of money market and checking and time deposit accounts.
Non-interest-bearing deposits at March 31, 2017, were $167.6 million, or 22.3% of deposits, compared to $152.0 million, or 20.5% of deposits, at December 31, 2016. Money market and checking deposit accounts were 46.9% of our deposit portfolio and totaled $352.6 million at March 31, 2017, compared to $361.4 million, or 48.7% of deposits, at December 31, 2016. Savings accounts increased to $93.3 million, or 12.4% of deposits, at March 31, 2017, from $88.3 million, or 11.9% of deposits, at December 31, 2016. Certificates of deposit totaled $139.2 million, or 18.4% of deposits, at March 31, 2017, compared to $139.8 million, or 18.9% of deposits, at December 31, 2016.
Certificates of deposit at March 31, 2017, scheduled to mature in one year or less, totaled $98.6 million. Historically, maturing deposits have generally remained with the Bank, and we believe that a significant portion of the deposits maturing in one year or less will remain with us upon maturity in some type of deposit account.
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Total borrowings decreased $4.6 million to $68.3 million at March 31, 2017, from $72.9 million at December 31, 2016. The decrease in total borrowings was primarily due to a decrease in our FHLB borrowings from $39.1 million at December 31, 2016 to $33.5 million at March 31, 2017, which was primarily the result of a $5.0 million FHLB advance maturity in the period ending March 31, 2017.
Cash Flows. During the three months ended March 31, 2017, our cash and cash equivalents increased by $66,000. Our operating activities used net cash of $496,000 during the first three months of 2017, primarily as a result of funding loans held for sale. Our investing activities used net cash of $5.2 million during the first three months of 2017, primarily as a result of the purchase of investment securities. Financing activities provided net cash of $5.8 million during the first three months of 2017, primarily as a result of increased deposit balances.
Liquidity. Our most liquid assets are cash and cash equivalents and investment securities available for sale. The levels of these assets are dependent on the operating, financing, lending and investing activities during any given year. These liquid assets totaled $417.0 million at March 31, 2017 and $405.6 million at December 31, 2016. During periods in which we are not able to originate a sufficient amount of loans and/or periods of high principal prepayments, we generally increase our liquid assets by investing in short-term, high-grade investments.
Liquidity management is both a daily and long-term function of our strategy. Excess funds are generally invested in short-term investments. Excess funds are typically generated as a result of increased deposit balances, while uses of excess funds are generally deposit withdrawals and loan advances. In the event we require funds beyond our ability to generate them internally, additional funds are generally available through the use of FHLB advances, a line of credit with the FHLB, other borrowings or through sales of investment securities. At March 31, 2017, we had outstanding FHLB advances of $30.0 million and $3.5 million of borrowings against our line of credit with the FHLB. At March 31, 2017, we had collateral pledged to the FHLB that would allow us to borrow an additional $62.0 million, subject to FHLB credit requirements and policies. At March 31, 2017, we had no borrowings through the Federal Reserve discount window, while our borrowing capacity with the Federal Reserve was $15.8 million. We also have various other federal funds agreements, both secured and unsecured, with correspondent banks totaling approximately $30.0 million in available credit under which we had no outstanding borrowings at March 31, 2017. At March 31, 2017, we had subordinated debentures totaling $21.3 million and other borrowings of $13.5 million, which consisted of repurchase agreements. At March 31, 2017, the Company had no borrowings against a $7.5 million line of credit from an unrelated financial institution maturing on November 1, 2017, with an interest rate that adjusts daily based on the prime rate plus 0.25%, and a floor of 3.75%. This line of credit has covenants specific to capital and other financial ratios, which the Company was in compliance with at March 31, 2017.
Off Balance Sheet Arrangements. As a provider of financial services, we routinely issue financial guarantees in the form of financial and performance standby letters of credit. Standby letters of credit are contingent commitments issued by us generally to guarantee the payment or performance obligation of a customer to a third party. While these standby letters of credit represent a potential outlay by us, a significant amount of the commitments may expire without being drawn upon. We have recourse against the customer for any amount the customer is required to pay to a third party under a standby letter of credit. The letters of credit are subject to the same credit policies, underwriting standards and approval process as loans made by us. Most of the standby letters of credit are secured, and in the event of nonperformance by the customers, we have the right to the underlying collateral, which could include commercial real estate, physical plant and property, inventory, receivables, cash and marketable securities. The contract amount of these standby letters of credit, which represents the maximum potential future payments guaranteed by us, was $821,000 at March 31, 2017.
At March 31, 2017, we had outstanding loan commitments, excluding standby letters of credit, of $82.3 million. We anticipate that sufficient funds will be available to meet current loan commitments. These commitments consist of unfunded lines of credit and commitments to finance real estate loans.
Capital. Current regulatory capital regulations require financial institutions (including banks and bank holding companies) to meet certain regulatory capital requirements. The Company and the Bank are subject to the Basel III Rules that implemented the Basel III regulatory capital reforms from the Basel Committee on Banking Supervision and certain changes required by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Basel III Rules are applicable to all U.S. banks that are subject to minimum capital requirements, as well as to bank and savings and loan holding companies other than “small bank holding companies” (generally, non-public bank holding companies with consolidated assets of less than $1.0 billion).
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The Basel III Rules require a common equity Tier 1 capital to risk-weighted assets minimum ratio of 4.5%, a Tier 1 capital to risk-weighted assets minimum ratio of 6.0%, a Total Capital to risk-weighted assets minimum ratio of 8.0%, and a Tier 1 leverage minimum ratio of 4.0%. A capital conservation buffer, comprised of common equity Tier 1 capital, is also established above the regulatory minimum capital requirements. This capital conservation buffer began on January 1, 2016 at 0.625% of risk-weighted assets, was 1.25% effective on January 1, 2017, and will increase each subsequent year by an additional 0.625% until reaching its final level of 2.5% on January 1, 2019. As of March 31, 2017 and December 31, 2016, the Bank was rated “well capitalized,” which is the highest rating available under the regulatory capital regulations framework for prompt corrective action. Management believed that as of March 31, 2017, the Company and the Bank met all capital adequacy requirements to which we are subject.
Dividends. During the quarter ended March 31, 2017, we paid a quarterly cash dividend of $0.20 per share to our stockholders.
The payment of dividends by any financial institution or its holding company is affected by the requirement to maintain adequate capital pursuant to applicable capital adequacy guidelines and regulations. In addition, under the Basel III Rules, financial institutions will have to maintain 2.5% in Common Equity Tier 1 attributable to the capital conservation buffer in order to pay dividends and do other capital distributions. This buffer is being phased in over three years beginning in 2016. As described above, the Bank exceeded its minimum capital requirements under applicable guidelines as of March 31, 2017. The National Bank Act imposes limitations on the amount of dividends that a national bank may pay without prior regulatory approval. Generally, the amount is limited to the bank's current year's net earnings plus the adjusted retained earnings for the two preceding years. As of March 31, 2017, approximately $17.9 million was available to be paid as dividends to the Company by the Bank without prior regulatory approval.
Additionally, our ability to pay dividends is limited by the subordinated debentures that are held by three business trusts that we control. Interest payments on the debentures must be paid before we pay dividends on our capital stock, including our common stock. We have the right to defer interest payments on the debentures for up to 20 consecutive quarters. However, if we elect to defer interest payments, all deferred interest must be paid before we may pay dividends on our capital stock.
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Average Assets/Liabilities. The following table reflects the tax-equivalent yields earned on average interest-earning assets and costs of average interest-bearing liabilities for the periods indicated (derived by dividing income or expense by the monthly average balance of assets or liabilities, respectively) as well as “net interest margin” (which reflects the effect of the net earnings balance) for the periods shown:
Three months ended | Three months ended | |||||||||||||||||||||||
March 31, 2017 | March 31, 2016 | |||||||||||||||||||||||
(Dollars in thousands) | Average balance | Income/ expense | Average yield/cost | Average balance | Income/ expense | Average yield/cost | ||||||||||||||||||
Assets | ||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||
Interest-bearing deposits at banks | $ | 8,809 | $ | 17 | 0.83 | % | $ | 6,934 | $ | 9 | 0.52 | % | ||||||||||||
Investment securities (1) | 393,540 | 2,586 | 2.66 | % | 359,074 | 2,366 | 2.65 | % | ||||||||||||||||
Loans receivable, net (2) | 420,523 | 5,072 | 4.89 | % | 426,014 | 5,236 | 4.94 | % | ||||||||||||||||
Total interest-earning assets | 822,872 | 7,675 | 3.78 | % | 792,022 | 7,611 | 3.87 | % | ||||||||||||||||
Non-interest-earning assets | 91,034 | 85,059 | ||||||||||||||||||||||
Total | $ | 913,906 | $ | 877,081 | ||||||||||||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Money market and checking | $ | 355,342 | $ | 181 | 0.21 | % | $ | 334,354 | $ | 105 | 0.13 | % | ||||||||||||
Savings accounts | 91,277 | 7 | 0.03 | % | 83,423 | 6 | 0.03 | % | ||||||||||||||||
Time deposits | 140,975 | 150 | 0.43 | % | 143,660 | 166 | 0.46 | % | ||||||||||||||||
Total interest-bearing deposits | 587,594 | 338 | 0.23 | % | 561,437 | 277 | 0.20 | % | ||||||||||||||||
FHLB advances and other borrowings | 71,738 | 482 | 2.72 | % | 72,438 | 493 | 2.74 | % | ||||||||||||||||
Total interest-bearing liabilities | 659,332 | 820 | 0.50 | % | 633,875 | 770 | 0.49 | % | ||||||||||||||||
Non-interest-bearing liabilities | 169,077 | 160,226 | ||||||||||||||||||||||
Stockholders' equity | 85,497 | 82,980 | ||||||||||||||||||||||
Total | $ | 913,906 | $ | 877,081 | ||||||||||||||||||||
Interest rate spread (3) | 3.28 | % | 3.38 | % | ||||||||||||||||||||
Net interest margin (4) | $ | 6,855 | 3.38 | % | $ | 6,841 | 3.47 | % | ||||||||||||||||
Tax-equivalent interest - imputed | 487 | 437 | ||||||||||||||||||||||
Net interest income | $ | 6,368 | $ | 6,404 | ||||||||||||||||||||
Ratio of average interest-earning assets to average interest-bearing liabilities | 124.8 | % | 124.9 | % |
(1) | Income on tax exempt securities is presented on a fully tax-equivalent basis, using a 34% federal tax rate. |
(2) | Includes loans classified as non-accrual. Income on tax-exempt loans is presented on a fully tax-equivalent basis, using a 34% federal tax rate. |
(3) | Interest rate spread represents the difference between the average yield earned on interest-earning assets and the average rate paid on interest-bearing liabilities. |
(4) | Net interest margin represents annualized, tax-equivalent net interest income divided by average interest-earning assets. |
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Rate/Volume Table. The following table describes the extent to which changes in tax-equivalent interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities affected the Company’s interest income and expense for the periods indicated. The table distinguishes between (i) changes attributable to rate (changes in rate multiplied by prior volume), (ii) changes attributable to volume (changes in volume multiplied by prior rate), and (iii) net change (the sum of (i) and (ii)). The net changes attributable to the combined effect of volume and rate that cannot be segregated have been allocated proportionately to the change due to volume and the change due to rate.
Three months ended March 31, | ||||||||||||
2017 vs 2016 | ||||||||||||
Increase/(decrease) attributable to | ||||||||||||
Volume | Rate | Net | ||||||||||
(Dollars in thousands) | ||||||||||||
Interest income: | ||||||||||||
Interest-bearing deposits at banks | $ | 3 | $ | 5 | $ | 8 | ||||||
Investment securities | 212 | 8 | 220 | |||||||||
Loans | (92 | ) | (72 | ) | (164 | ) | ||||||
Total | 123 | (59 | ) | 64 | ||||||||
Interest expense: | ||||||||||||
Deposits | 14 | 47 | 61 | |||||||||
Other borrowings | (6 | ) | (5 | ) | (11 | ) | ||||||
Total | 8 | 42 | 50 | |||||||||
Net interest margin | $ | 115 | $ | (101 | ) | $ | 14 |
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our assets and liabilities are principally financial in nature, and the resulting net interest income thereon is subject to changes in market interest rates and the mix of various assets and liabilities. Interest rates in the financial markets affect our decisions relating to pricing our assets and liabilities, which impact net interest income, a significant cash flow source for us. As a result, a substantial portion of our risk management activities relates to managing interest rate risk.
Our Asset/Liability Management Committee monitors the interest rate sensitivity of our balance sheet using earnings simulation models. We have set policy limits of interest rate risk to be assumed in the normal course of business and monitor such limits through our simulation process.
We have been successful in meeting the interest rate sensitivity objectives set forth in our policy. Simulation models are prepared to determine the impact on net interest income for the coming twelve months, including one using rates at March 31, 2017, and forecasting volumes for the twelve-month projection. This position is then subjected to a shift in interest rates of 100 and 200 basis points with an impact to our net interest income on a one-year horizon as follows:
Dollar change in net | Percent change in | |||||||
Scenario | interest income ($000’s) | net interest income | ||||||
200 basis point rising | $ | (1,044 | ) | (3.7 | %) | |||
100 basis point rising | $ | (548 | ) | (1.9 | %) | |||
100 basis point falling | $ | (407 | ) | (1.4 | %) | |||
200 basis point falling | NM | NM |
The 200 basis point falling scenario is considered to be not meaningful (“NM”) in the current low interest rate environment.
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Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
Forward-Looking Statements
This document (including information incorporated by reference) contains, and future oral and written statements by us and our management may contain, forward-looking statements, within the meaning of such term in the Private Securities Litigation Reform Act of 1995, with respect to our financial condition, results of operations, plans, objectives, future performance and business. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of our management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and we undertake no obligation to update any statement in light of new information or future events.
Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on operations and future prospects of us and our subsidiaries include, but are not limited to, the following:
· | The strength of the United States economy in general and the strength of the local economies in which we conduct our operations which may be less favorable than expected and may result in, among other things, a deterioration in the credit quality and value of our assets. |
· | The effects of, and changes in, federal, state and local laws, regulations and policies affecting banking, securities, insurance and monetary and financial matters (including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations promulgated thereunder, as well as the Basel III Rules) and the effects of increases in FDIC premiums. |
· | The effects of changes in interest rates (including the effects of changes in the rate of prepayments of our assets) and the policies of the Board of Governors of the Federal Reserve System. |
· | Our ability to compete with other financial institutions as effectively as we currently do due to increases in competitive pressures in the financial services sector. |
· | Our inability to obtain new customers and to retain existing customers. |
· | The timely development and acceptance of products and services, including products and services offered through alternative delivery channels such as the Internet. |
· | Technological changes implemented by us and by other parties, including third-party vendors, which may be more difficult or more expensive than anticipated or which may have unforeseen consequences to us and our customers. |
· | Our ability to develop and maintain secure and reliable electronic systems. |
· | Our ability to retain key executives and employees and the difficulty that we may experience in replacing key executives and employees in an effective manner. |
· | Consumer spending and saving habits which may change in a manner that affects our business adversely. |
· | Our ability to successfully integrate acquired businesses and future growth. |
· | The costs, effects and outcomes of existing or future litigation. |
· | Changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies and the FASB. |
· | The economic impact of past and any future terrorist attacks, acts of war or threats thereof, and the response of the United States to any such threats and attacks. |
· | Our ability to effectively manage our credit risk. |
· | Our ability to forecast probable loan losses and maintain an adequate allowance for loan losses. |
· | The effects of declines in the value of our investment portfolio. |
· | Our ability to raise additional capital if needed. |
· | The effects of cyber-attacks. |
· | The effects of declines in real estate markets. |
These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning us and our business, including other factors that could materially affect our financial results, is included in our filings with the Securities and Exchange Commission, including the “Risk Factors” section in our Annual Report on Form 10-K for the year ended December 31, 2016.
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ITEM 4. CONTROLS AND PROCEDURES
An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934, as amended) as of March 31, 2017. Based on that evaluation, the Company’s management, including the Chief Executive Officer and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2017.
There were no changes in the Company’s internal control over financial reporting during the quarter ended March 31, 2017 that materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.
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There are no material pending legal proceedings to which the Company or its subsidiaries is a party or which any of their property is subject, other than ordinary routine litigation incidental to their respective businesses.
There have been no material changes in the risk factors applicable to the Company from those disclosed in Part I, Item 1A. “Risk Factors,” in the Company's 2016 Annual Report on Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable
None
Exhibit 31.1 | Certificate of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) | |
Exhibit 31.2 | Certificate of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) | |
Exhibit 32.1 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
Exhibit 32.2 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
Exhibit 101 | Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets as of March 31, 2017 and December 31, 2016; (ii) Consolidated Statements of Earnings for the three months ended March 31, 2017 and March 31, 2016; (iii) Consolidated Statements of Comprehensive Income for the three months ended March 31, 2017 and March 31, 2016; (iv) Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2017 and March 31, 2016; (v) Consolidated Statements of Cash Flows for the three months ended March 31, 2017 and March 31, 2016; and (vi) Notes to Consolidated Financial Statements |
36 |
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
LANDMARK BANCORP, INC. | |
Date: May 05, 2017 | /s/ Michael E. Scheopner |
Michael E. Scheopner | |
President and Chief Executive Officer | |
Date: May 05, 2017 | /s/ Mark A. Herpich |
Mark A. Herpich | |
Vice President, Secretary, Treasurer | |
and Chief Financial Officer |
37 |
Exhibit 31.1
CERTIFICATION PURSUANT TO
RULE 13a-14(a)/15d-14(a)
I, Michael E. Scheopner, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of Landmark Bancorp, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 5, 2017 | /s/ Michael E. Scheopner |
Michael E. Scheopner | |
Chief Executive Officer |
Exhibit 31.2
CERTIFICATION PURSUANT TO
RULE 13a-14(a)/15d-14(a)
I, Mark A. Herpich, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of Landmark Bancorp, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 5, 2017 | /s/ Mark A. Herpich |
Mark A. Herpich | |
Chief Financial Officer |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Landmark Bancorp, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael E. Scheopner, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Michael E. Scheopner | |
Michael E. Scheopner Chief Executive Officer |
|
May 5, 2017 |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Landmark Bancorp, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark A. Herpich, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Mark A. Herpich | |
Mark A. Herpich | |
Chief Financial Officer | |
May 5, 2017 |
Document And Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
May 04, 2017 |
|
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | LANDMARK BANCORP INC | |
Entity Central Index Key | 0001141688 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | LARK | |
Entity Common Stock, Shares Outstanding | 3,869,922 |
CONSOLIDATED BALANCE SHEETS [Parenthetical] - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Net of allowance for loans losses (in dollars) | $ 5,327 | $ 5,344 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 200,000 | 200,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 7,500,000 | 7,500,000 |
Common stock, shares issued | 3,869,922 | 3,868,077 |
Common stock, shares, outstanding | 3,869,922 | 3,868,077 |
CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) $ in Thousands |
3 Months Ended | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|||||||||||||||||
Loans: | ||||||||||||||||||
Taxable | $ 5,019 | $ 5,136 | ||||||||||||||||
Tax-exempt | 35 | 66 | ||||||||||||||||
Investment securities: | ||||||||||||||||||
Taxable | 1,192 | 1,163 | ||||||||||||||||
Tax-exempt | 942 | 809 | ||||||||||||||||
Total interest income | 7,188 | 7,174 | ||||||||||||||||
Interest expense: | ||||||||||||||||||
Deposits | 338 | 277 | ||||||||||||||||
Borrowings | 482 | 493 | ||||||||||||||||
Total interest expense | 820 | 770 | ||||||||||||||||
Net interest income | 6,368 | 6,404 | ||||||||||||||||
Provision for loan losses | 50 | 50 | ||||||||||||||||
Net interest income after provision for loan losses | 6,318 | 6,354 | ||||||||||||||||
Non-interest income: | ||||||||||||||||||
Fees and service charges | 1,715 | 1,729 | ||||||||||||||||
Gains on sales of loans, net | 1,389 | 1,794 | ||||||||||||||||
Bank owned life insurance | 117 | 120 | ||||||||||||||||
Gains on sales of investment securities, net | 147 | 12 | ||||||||||||||||
Other | 273 | 239 | ||||||||||||||||
Total non-interest income | 3,641 | 3,894 | ||||||||||||||||
Non-interest expense: | ||||||||||||||||||
Compensation and benefits | 3,757 | 3,801 | ||||||||||||||||
Occupancy and equipment | 1,024 | 1,056 | ||||||||||||||||
Data processing | 330 | 311 | ||||||||||||||||
Amortization of intangibles | 298 | 337 | ||||||||||||||||
Professional fees | 290 | 219 | ||||||||||||||||
Advertising | 166 | 166 | ||||||||||||||||
Federal deposit insurance premiums | 72 | 110 | ||||||||||||||||
Foreclosure and real estate owned expense | 52 | 65 | ||||||||||||||||
Other | 1,072 | 1,097 | ||||||||||||||||
Total non-interest expense | 7,061 | 7,162 | ||||||||||||||||
Earnings before income taxes | 2,898 | 3,086 | ||||||||||||||||
Income tax expense | [1] | 693 | 693 | |||||||||||||||
Net earnings | [1],[2],[3],[4] | $ 2,205 | $ 2,393 | [5] | ||||||||||||||
Earnings per share: | ||||||||||||||||||
Basic (in dollars per share) | [4],[6],[7] | $ 0.57 | $ 0.64 | |||||||||||||||
Diluted (in dollars per share) | [1],[4],[6],[7] | 0.56 | 0.63 | |||||||||||||||
Dividends per share (in dollars per share) | [6] | $ 0.20 | $ 0.19 | |||||||||||||||
|
CONSOLIDATED STATEMENTS OF EARNINGS [Parenthetical] |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2016 |
Dec. 31, 2016 |
||||
Percentage Of Stocks Dividend | 5.00% | [1] | 5.00% | ||
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
||||||||||||
Net earnings | [1],[2],[3],[4] | $ 2,205 | $ 2,393 | [5] | |||||||||
Net unrealized holding gains on available-for-sale securities | 522 | 3,390 | |||||||||||
Less reclassification adjustment for net gains included in earnings | (147) | (12) | |||||||||||
Net unrealized gains | 375 | 3,378 | |||||||||||
Income tax effect on net gains included in earnings | 54 | 4 | |||||||||||
Income tax effect on net unrealized holding gains | (200) | (1,257) | |||||||||||
Other comprehensive income | 229 | 2,125 | |||||||||||
Total comprehensive income | $ 2,434 | $ 4,518 | |||||||||||
|
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands |
Total |
Common stock [Member] |
Additional paid-in capital [Member] |
Retained earnings [Member] |
Accumulated other comprehensive income (loss) [Member] |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance at Dec. 31, 2015 | $ 80,570 | $ 35 | $ 45,372 | $ 32,988 | $ 2,175 | ||||||||||||
Net earnings | [2] | 2,393 | [1],[3],[4],[5] | 0 | 0 | 2,393 | 0 | ||||||||||
Other comprehensive income | 2,125 | 0 | 0 | 0 | 2,125 | ||||||||||||
Dividends paid | (713) | 0 | 0 | (713) | 0 | ||||||||||||
Exercise of stock options | [2] | 825 | 1 | 824 | 0 | 0 | |||||||||||
Balance at Mar. 31, 2016 | 85,200 | 36 | 46,196 | 34,668 | 4,300 | ||||||||||||
Balance at Dec. 31, 2016 | 84,951 | 38 | 51,968 | 34,293 | (1,348) | ||||||||||||
Net earnings | 2,205 | [1],[3],[4],[5] | 0 | 0 | 2,205 | 0 | |||||||||||
Other comprehensive income | 229 | 0 | 0 | 0 | 229 | ||||||||||||
Dividends paid | (774) | 0 | 0 | (774) | 0 | ||||||||||||
Stock-based compensation | 35 | 0 | 35 | 0 | 0 | ||||||||||||
Exercise of stock options | 23 | 1 | 22 | 0 | 0 | ||||||||||||
Balance at Mar. 31, 2017 | $ 86,669 | $ 39 | $ 52,025 | $ 35,724 | $ (1,119) | ||||||||||||
|
Interim Financial Statements |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2017 | |||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] |
The unaudited consolidated financial statements of Landmark Bancorp, Inc. (the “Company”) and its subsidiary, Landmark National Bank (the “Bank”) have been prepared in accordance with the instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements and should be read in conjunction with the Company’s most recent Annual Report on Form 10-K, containing the latest audited consolidated financial statements and notes thereto. The consolidated financial statements in this report have not been audited by an independent registered public accounting firm, but in the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation of financial statements have been reflected herein. The results of the three month interim period ended March 31, 2017 are not necessarily indicative of the results expected for the year ending December 31, 2017 or any other future time period. The Company has evaluated subsequent events for recognition and disclosure up to the date the financial statements were issued. |
Investments |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities [Text Block] |
A summary of investment securities available-for-sale is as follows:
The tables above show that some of the securities in the available-for-sale investment portfolio had unrealized losses, or were temporarily impaired, as of March 31, 2017 and December 31, 2016. This temporary impairment represents the estimated amount of loss that would be realized if the securities were sold on the valuation date. Securities which were temporarily impaired are shown below, along with the length of time in a continuous unrealized loss position.
The Company’s U.S. federal agency portfolio consists of securities issued by the government-sponsored agencies of Federal Home Loan Mortgage Corporation (“FHLMC”), Federal National Mortgage Association (“FNMA”) and Federal Home Loan Bank (“FHLB”). The receipt of principal and interest on U.S. federal agency obligations is guaranteed by the respective government-sponsored agency guarantor, such that the Company believes that its U.S. federal agency obligations do not expose the Company to credit-related losses. Based on these factors, along with the Company’s intent to not sell the securities and its belief that it was more likely than not that the Company will not be required to sell the securities before recovery of their cost basis, the Company believed that the U.S. federal agency obligations identified in the tables above were temporarily impaired as of the March 31, 2017 and December 31, 2016. The Company’s portfolio of municipal obligations consists of both tax-exempt and taxable general obligations securities issued by various municipalities. As of March 31, 2017, the Company did not intend to sell and it is more likely than not that the Company will not be required to sell its municipal obligations in an unrealized loss position until the recovery of its cost. Due to the issuers’ continued satisfaction of the securities’ obligations in accordance with their contractual terms and the expectation that they will continue to do so, the evaluation of the fundamentals of the issuers’ financial condition and other objective evidence, the Company believed that the municipal obligations identified in the tables above were temporarily impaired as of the March 31, 2017 and December 31, 2016. The Company’s agency mortgage-backed securities portfolio consists of securities underwritten to the standards of and guaranteed by the government-sponsored agencies of FHLMC, FNMA and the Government National Mortgage Association. The receipt of principal, at par, and interest on agency mortgage-backed securities is guaranteed by the respective government-sponsored agency guarantor, such that the Company believed that its agency mortgage-backed securities did not expose the Company to credit-related losses. Based on these factors, along with the Company’s intent to not sell the securities and the Company’s belief that it was more likely than not that the Company will not be required to sell the securities before recovery of their cost basis, the Company believed that the agency mortgage-backed securities identified in the tables above were temporarily impaired as of the March 31, 2017 and December 31, 2016. The table below sets forth amortized cost and fair value of investment securities at March 31, 2017. The table includes scheduled principal payments and estimated prepayments, based on observable market inputs, for agency mortgage-backed securities. Actual maturities will differ from contractual maturities because borrowers have the right to prepay obligations with or without prepayment penalties. Securities with no maturity are listed separately.
Sales proceeds and gross realized gains and losses on sales of available-for-sale securities are as follows for the periods indicated:
Securities with carrying values of $217.5 million and $224.3 million were pledged to secure public funds on deposit, repurchase agreements and as collateral for borrowings at March 31, 2017 and December 31, 2016, respectively. Except for U.S. federal agency obligations, no investment in a single issuer exceeded 10% of consolidated stockholders’ equity. |
Loans and Allowance for Loan Losses |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] |
Loans consisted of the following as of the dates indicated below:
The following tables provide information on the Company’s allowance for loan losses by loan class and allowance methodology:
The Company recorded net loan charge-offs of $67,000 during the first quarter of 2017 compared to net loan charge-offs of $103,000 during the first quarter of 2016. The Company’s impaired loans decreased from $6.7 million at December 31, 2016 to $6.5 million at March 31, 2017. The difference between the unpaid contractual principal and the impaired loan balance is a result of charge-offs recorded against impaired loans. The difference in the Company’s non-accrual loan balances and impaired loan balances at March 31, 2017 and December 31, 2016, was related to troubled debt restructurings (“TDR”) that are current and accruing interest, but still classified as impaired. Interest income recognized on a cash basis was immaterial during the three months ended March 31, 2017 and 2016. The following tables present information on impaired loans:
The Company’s key credit quality indicator is a loan’s performance status, defined as accruing or non-accruing. Performing loans are considered to have a lower risk of loss. Non-accrual loans are those which the Company believes have a higher risk of loss. The accrual of interest on non-performing loans is discontinued at the time the loan is ninety days delinquent, unless the credit is well secured and in process of collection. Loans are placed on non-accrual or are charged off at an earlier date if collection of principal or interest is considered doubtful. There were no loans ninety days delinquent and accruing interest at March 31, 2017 or December 31, 2016. The following tables present information on the Company’s past due and non-accrual loans by loan class:
Under the original terms of the Company’s non-accrual loans, interest earned on such loans for the three months ended March 31, 2017 and 2016 would have increased interest income by $31,000 and $33,000, respectively. No interest income related to non-accrual loans was included in interest income for the three months ended March 31, 2017 and 2016. The Company also categorizes loans into risk categories based on relevant information about the ability of the borrowers to service their debt, such as current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis. Nonclassified loans generally include those loans that are expected to be repaid in accordance with contractual loan terms. Classified loans are those that are assigned a special mention, substandard or doubtful risk rating using the following definitions: Special Mention: Loans are currently protected by the current net worth and paying capacity of the obligor or of the collateral pledged but such protection is potentially weak. These loans constitute an undue and unwarranted credit risk, but not to the point of justifying a classification of substandard. The credit risk may be relatively minor, yet constitutes an unwarranted risk in light of the circumstances surrounding a specific asset. Substandard: Loans are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged. Loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Loans are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Doubtful: Loans classified doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. The following table provides information on the Company’s risk categories by loan class:
At March 31, 2017, the Company had twelve loan relationships consisting of eighteen outstanding loans that were classified as TDRs. During the first three months of 2017, the Company classified a $11,000 commercial real estate loan as a TDR after extending the maturity of the loan and classified as a TDR a $15,000 agriculture loan extended to an existing loan relationship that was classified as a TDR in 2016. Since the loans were adequately secured, no charge-offs or impairments were recorded against the principal as of March 31, 2017. During the first quarter of 2016, a $44,000 agriculture loan relationship consisting of two loans was classified as a TDR after extending the maturity of the loans. The Company evaluates each TDR individually and returns the loan to accrual status when a payment history is established after the restructuring and future payments are reasonably assured. There were no loans modified as TDRs for which there was a payment default within 12 months of modification as of March 31, 2017 and 2016. At March 31, 2017, there was a commitment of $84,000 to lend additional funds on one construction and land loan classified as a TDR. The Company did not record any charge-offs against loans classified as TDRs in the first quarter either of 2017 or 2016. A credit provision for loan losses of $13,000 related to TDRs was recorded in the three months ended March 31, 2017 compared to no provision in the same period of 2016. The Company had $67,000 and $80,000 allowance for loan losses recorded against loans classified as TDRs at March 31, 2017 and December 31, 2016, respectively. The following table presents information on loans that are classified as TDRs:
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Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Text Block] |
The Company tests goodwill for impairment annually or more frequently if circumstances warrant. The Company’s annual step one impairment test as of December 31, 2016 concluded that its goodwill was not impaired. The Company concluded there were no triggering events during the first three months of 2017 that required an interim goodwill impairment test. Lease intangible assets are amortized over the life of the lease. Core deposit intangible assets are amortized over the estimated useful life of ten years on an accelerated basis. Mortgage servicing rights are amortized over the estimated life of the mortgage loan serviced for others. A summary of the other intangible assets that continue to be subject to amortization is as follows:
The following sets forth estimated amortization expense for core deposit and lease intangible assets for the remainder of 2017 and in successive years ending December 31:
Mortgage loans serviced for others are not reported as assets. The following table provides information on the principal balances of mortgage loans serviced for others:
Custodial escrow balances maintained in connection with serviced loans were $7.2 million and $4.1 million at March 31, 2017 and December 31, 2016, respectively. Gross service fee income related to such loans was $319,000 and $300,000 for the three months ended March 31, 2017 and 2016, respectively, and is included in fees and service charges in the consolidated statements of earnings. Activity for mortgage servicing rights is as follows:
The fair value of mortgage servicing rights was $5.4 million and $5.1 million at March 31, 2017 and December 31, 2016, respectively. Fair value at March 31, 2017 was determined using discount rates ranging from 9.50% to 9.51%; prepayment speeds ranging from 4.39% to 33.19%, depending on the stratification of the specific mortgage servicing right; and a weighted average default rate of 2.24%. Fair value at December 31, 2016 was determined using discount rates ranging from 9.50% to 9.51%, prepayment speeds ranging from 4.86% to 32.79%, depending on the stratification of the specific mortgage servicing right, and a weighted average default rate of 2.26%. The Company had a mortgage repurchase reserve of $301,000 at both March 31, 2017 and December 31, 2016, which represents the Company’s best estimate of probable losses that the Company will incur related to the repurchase of one-to-four family residential real estate loans previously sold or to reimburse investors for credit losses incurred on loans previously sold where a breach of the contractual representations and warranties occurred. The Company did not incur any losses charged against the reserve or make any provisions to the reserve during the first three months of 2017 and 2016. The Company recovered $7,000 of losses against the mortgage repurchase reserve during three months ended March 31, 2016. As of March 31, 2017, the Company had one outstanding mortgage repurchase request and expects to incur a loss of approximately $70,000. |
Earnings per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Text Block] |
Basic earnings per share have been computed based upon the weighted average number of common shares outstanding during each period. Diluted earnings per share include the effect of all potential common shares outstanding during each period. The diluted earnings per share computations for the three months ended March 31, 2017 and 2016 include all unexercised stock options because no stock options were anti-dilutive as of such dates. The shares used in the calculation of basic and diluted earnings per share are shown below:
(1) Net earnings, diluted earnings per share and assumed exercise of stock options for the period ended March 31, 2016 have been recast to relect the early adoption of ASU 2016-09. (2) Share and per share values for the period ended March 31, 2016 have been adjusted to give effect to the 5% stock dividend paid during December 2016. |
Repurchase Agreements |
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Repurchase Agreements, Resale Agreements, Securities Borrowed, and Securities Loaned Disclosure [Text Block] |
The Company has overnight repurchase agreements with certain deposit customers whereby the Company uses investment securities as collateral for non-insured funds. These balances are accounted for as collateralized financing and included in other borrowings on the balance sheet. The following is a summary of the balances and collateral of the Company’s repurchase agreements:
Repurchase agreements are comprised of non-insured customer funds, totaling $13.5 million at March 31, 2017 and $12.5 million at December 31, 2016, which were secured by $19.7 million and $15.7 million of the Company’s investment portfolio at the same dates, respectively. The investment securities are held by a third party financial institution in the customer’s custodial account. The Company is required to maintain adequate collateral for each repurchase agreement. Changes in the fair value of the investment securities impact the amount of collateral required. If the Company were to default, the investment securities would be used to settle the repurchase agreement with the deposit customer. |
Fair Value of Financial Instruments and Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Text Block] |
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (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. There are three levels of inputs that may be used to measure fair values: Level 1 Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2 Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. Fair value estimates of the Company’s financial instruments as of March 31, 2017 and December 31, 2016, including methods and assumptions utilized, are set forth below:
Methods and Assumptions Utilized The carrying amount of cash and cash equivalents is considered to approximate fair value. The Company’s investment securities classified as available-for-sale include U.S. treasury securities, U.S. federal agency securities, municipal obligations, agency mortgage-backed securities, certificates of deposits and common stocks. Quoted exchange prices are available for the Company’s U.S treasury securities and common stock investments, which are classified as Level 1. U.S. federal agency securities and agency mortgage-backed obligations are priced utilizing industry-standard models that consider various assumptions, including time value, yield curves, volatility factors, prepayment speeds, default rates, loss severity, current market and contractual prices for the underlying financial instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. These measurements are classified as Level 2. Municipal securities are valued using a type of matrix, or grid, pricing in which securities are benchmarked against U.S. treasury rates based on credit rating. These model and matrix measurements are classified as Level 2 in the fair value hierarchy. It is not practical to determine the fair value of bank stocks due to restrictions placed on the transferability of FHLB and Federal Reserve Bank stock. The estimated fair value of the Company’s loan portfolio is based on the segregation of loans by collateral type, interest terms, and maturities. The fair value is estimated based on discounting scheduled and estimated cash flows through maturity using an appropriate risk-adjusted yield curve to approximate current interest rates for each category. No adjustment was made to the interest rates for changes in credit risk of performing loans where there are no known credit concerns. Management segregates loans in appropriate risk categories. Management believes that the risk factor embedded in the interest rates along with the allowance for loan losses applicable to the performing loan portfolio results in a fair valuation of such loans. The fair values of impaired loans are generally based on market prices for similar assets determined through independent appraisals or discounted values of independent appraisals and brokers’ opinions of value. This method of estimating fair value does not incorporate the exit-price concept of fair value prescribed by ASC Topic 820 and is classified as Level 3. Mortgage loans originated and intended for sale in the secondary market are carried at fair value. The mortgage loan valuations are based on quoted secondary market prices for similar loans and are classified as Level 2. The carrying amount of accrued interest receivable and payable are considered to approximate fair value. The estimated fair value of deposits with no stated maturity, such as non-interest-bearing demand deposits, savings, money market accounts, and checking accounts, is equal to the amount payable on demand. The fair value of interest-bearing time deposits is based on the discounted value of contractual cash flows of such deposits. The discount rate is tied to the FHLB yield curve plus an appropriate servicing spread. Fair value measurements based on discounted cash flows are classified as Level 2. These fair values do not incorporate the value of core deposit intangibles which may be associated with the deposit base. The fair value of advances from the FHLB, subordinated debentures, and other borrowings is estimated using current yield curves for similar borrowings adjusted for the Company’s current credit spread and classified as Level 2. The Company’s derivative financial instruments consist of interest rate lock commitments and corresponding forward sales contracts on mortgage loans held for sale. The fair values of these derivatives are based on quoted prices for similar loans in the secondary market. The market prices are adjusted by a factor, based on the Company’s historical data and its judgment about future economic trends, which considers the likelihood that a commitment will ultimately result in a closed loan. These instruments are classified as Level 2. The amounts are included in other assets or other liabilities on the consolidated balance sheets and gains on sale of loans, net in the consolidated statements of earnings. Off-Balance-Sheet Financial Instruments The fair value of letters of credit and commitments to extend credit is based on the fees currently charged to enter into similar agreements. The aggregate amount of these fees is not material. Transfers The Company did not transfer any assets or liabilities among levels during the three months ended March 31, 2017 or during the year ended December 31, 2016. Valuation Methods for Instruments Measured at Fair Value on a Recurring Basis The following tables represent the Company’s financial instruments that are measured at fair value on a recurring basis at March 31, 2017 and December 31, 2016, allocated to the appropriate fair value hierarchy:
Changes in the fair value of available-for-sale securities are included in other comprehensive income to the extent the changes are not considered other-than-temporary impairments. Other-than-temporary impairment tests are performed on a quarterly basis and any decline in the fair value of an individual security below its cost that is deemed to be other-than-temporary results in a write-down of that security’s cost basis. The aggregate fair value, contractual balance (including accrued interest), and gain on loans held for sale were as follows:
The total amount of gains from changes in fair value of loans held for sale included in earnings were as follows:
Valuation Methods for Instruments Measured at Fair Value on a Nonrecurring Basis The Company does not value its loan portfolio at fair value. Collateral-dependent impaired loans are generally carried at the lower of cost or fair value of the collateral, less estimated selling costs. Collateral values are determined based on appraisals performed by qualified licensed appraisers hired by the Company and then further adjusted if warranted based on relevant facts and circumstances. The appraisals may utilize a single valuation approach or a combination of approaches including the comparable sales and income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value. Impaired loans are reviewed and evaluated at least quarterly for additional impairment and adjusted accordingly, based on the same factors identified above. The carrying value of the Company’s impaired loans was $6.2 million and $6.5 million, with an allocated allowance of $308,000 and $274,000, at March 31, 2017 and December 31, 2016, respectively. Real estate owned includes assets acquired through, or in lieu of, foreclosure and land previously acquired for expansion. Real estate owned is initially recorded at the fair value of the collateral less estimated selling costs. Subsequent valuations are updated periodically and are based upon independent appraisals, third party price opinions or internal pricing models. The appraisals may utilize a single valuation approach or a combination of approaches including the comparable sales and income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value. Real estate owned is reviewed and evaluated at least annually for additional impairment and adjusted accordingly, based on the same factors identified above. The following tables represent the Company’s financial instruments that are measured at fair value on a non-recurring basis as of March 31, 2017 and December 31, 2016 allocated to the appropriate fair value hierarchy:
The following table presents quantitative information about Level 3 fair value measurements measured at fair value on a non-recurring basis as of March 31, 2017 and December 31, 2016.
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Regulatory Capital Requirements |
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Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Capital Requirements under Banking Regulations [Text Block] |
Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Management believed that as of March 31, 2017, the Company and the Bank met all capital adequacy requirements to which they were subject at that time. Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. The Company and the Bank are subject to the capital rules (the “Basel III Rules”) that implemented the Basel III regulatory capital reforms from the Basel Committee on Banking Supervision and certain changes required by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Basel III Rules are applicable to all U.S. banks that are subject to minimum capital requirements, as well as to bank and savings and loan holding companies other than “small bank holding companies” (generally, non-public bank holding companies with consolidated assets of less than $1.0 billion). The Basel III Rules require a common equity Tier 1 capital to risk-weighted assets minimum ratio of 4.5%, a Tier 1 capital to risk-weighted assets minimum ratio of 6.0%, a Total Capital to risk-weighted assets minimum ratio of 8.0%, and a Tier 1 leverage minimum ratio of 4.0%. A capital conservation buffer, comprised of common equity Tier 1 capital, is also established above the regulatory minimum capital requirements. This capital conservation buffer began on January 1, 2016 at 0.625% of risk-weighted assets, was 1.25% effective on January 1, 2017, and will further increase each subsequent year by an additional 0.625% until reaching its final level of 2.5% on January 1, 2019. The capital conservation buffer increases the common equity Tier 1 capital ratio, Tier 1 capital and total risk based capital ratios as of March 31 of each year. As of March 31, 2017 and December 31, 2016, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action then in effect. There are no conditions or events since that notification that management believes have changed the institution’s category. The following is a comparison of the Company’s regulatory capital to minimum capital requirements at March 31, 2017 and December 31, 2016:
(1) The required ratios for capital adequacy purposes include a capital conservation buffer of 1.25% for March 31, 2017 and 0.625% for December 31, 2016. The following is a comparison of the Bank’s regulatory capital to minimum capital requirements at March 31, 2017 and December 31, 2016:
(1) The required ratios for capital adequacy purposes include a capital conservation buffer of 1.25% for March 31, 2017 and 0.625% for December 31, 2016. |
Impact of Recent Accounting Pronouncements |
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New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |||||
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] |
In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The main provisions of the update require the identification of performance obligations within a contract and require the recognition of revenue based on a stand-alone allocation of contract revenue to each performance obligation. Performance obligations may be satisfied and revenue recognized over a period of time if: 1) the customer simultaneously receives and consumes the benefits provided by the entity’s performance as the entity performs, or 2) the entity’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced, or 3) the entity’s performance does not create an asset with an alternative use to the entity, and the entity has an enforceable right to payment for performance completed to date. For public entities the amendments of the update are effective for annual reporting periods beginning after December 15, 2017 including interim periods within that reporting periodThe Company’s revenue is primarily comprised of net interest income on financial asset and liabilities, which are excluded from the scope of ASU 2014-09. Management is still evaluating the impact of ASU 2014-09 on other non-interest income, but does not believe the adoption of ASU 2014-09 will have a material impact on the Company’s financial position, results of operations or cash flows. In January 2016, the FASB issued ASU 2016-01, Financial Instruments (Topic 825): Recognition and Measurement of Financial Assets and Liabilities. The main provisions of the update are to eliminate the available for sale classification of accounting for equity securities and to adjust the fair value disclosures for financial instruments carried at amortized costs such that the disclosed fair values represent an exit price as opposed to an entry price. The provisions of this update will require that equity securities be carried at fair market value on the balance sheet and any periodic changes in value will be adjustments to the income statement. A practical expedient is provided for equity securities without a readily determinable fair value, such that these securities can be carried at cost less any impairment. The provisions of this update become effective for interim and annual periods beginning after December 15, 2017. Upon the effective date of the update, changes in the value of the Company's common stock investments will be adjustments to the income statement. Management has concluded that the remaining requirements of this update are not expected to have a material impact on the Company’s financial position, results of operations or cash flows. In February 2016, the FASB issued an update (ASU No. 2016-02, Leases) creating FASB Topic 842, Leases. The guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and requiring more disclosures related to leasing transactions. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. Management has concluded that based on the Company’s current operating leases, the adoption of ASU 2016-02 will not have a material impact on the Company’s consolidated financial statement and related disclosures. In March 2016, the FASB issued an update, ASU No. 2016-09, Stock Compensation: Improvements to Employee Share-Based Payment Accounting. The guidance in this update affects any entity that issues share-based payment awards including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flow. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early adoption was permitted. The Company elected to adopt ASU 2016-09 in 2016. As a result of this election, income tax expense decreased by $308,000 during 2016 as a result of recognized excess tax benefits from the exercise of stock options. The presentation of excess tax benefits from the exercise of stock options have been presented on a prospective basis and are included in changes in accrued interest and other assets in the operating activities section of the statement of cash flows. The Company’s excess tax benefits from the exercise of stock options totaled $12,000 in the first quarter of 2017 and $116,000 in the first quarter of 2016. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), commonly referred to as “CECL.” The provisions of the update eliminate the probable initial recognition threshold under current GAAP which requires reserves to be based on an incurred loss methodology. Under CECL, reserves required for financial assets measured at amortized cost will reflect an organization’s estimate of all expected credit losses over the expected term of the financial asset and thereby require the use of reasonable and supportable forecasts to estimate future credit losses. Because CECL encompasses all financial assets carried at amortized cost, the requirement that reserves be established based on an organization’s reasonable and supportable estimate of expected credit losses extends to held to maturity debt securities. Under the provisions of the update, credit losses recognized on available for sale debt securities will be presented as an allowance as opposed to a write-down. In addition, CECL will modify the accounting for purchased loans, with credit deterioration since origination, so that reserves are established at the date of acquisition for purchased loans. Under current GAAP a purchased loan’s contractual balance is adjusted to fair value through a credit discount and no reserve is recorded on the purchased loan upon acquisition. Since under CECL reserves will be established for purchased loans at the time of acquisition, the accounting for purchased loans is made more comparable to the accounting for originated loans. Finally, increased disclosure requirements under CECL oblige organizations to present the currently required credit quality disclosures disaggregated by the year of origination or vintage. FASB expects that the evaluation of underwriting standards and credit quality trends by financial statement users will be enhanced with the additional vintage disclosures. For public entities, the amendments of the update are effective beginning January 1, 2020. Management has initiated an implementation committee to assist in assessing data and system needs for the new standard. Management anticipates the effect will be an increase to the allowance for loan losses upon adoption. However, the size of the overall increase is uncertain at this time. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Payments (a consensus of Emerging Issues Task Force). This ASU attempts to clarify how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The purpose of this update is to reduce existing diversity in practice in eight areas addressed by the update. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted. Management has concluded that the adoption of ASU 2016-15 will not have a material impact on the Company’s consolidated financial statements and related disclosures. In March 2017, the FASB issued ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The provisions of this update become effective for interim and annual periods beginning after December 15, 2018. Management has concluded that based on the Company’s current portfolio of investment securities that the adoption of these amendments will result in shorter amortization period for investment security premiums, which will initially result in lower interest income on investment securities. |
Investments (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Available-for-sale Securities [Table Text Block] | A summary of investment securities available-for-sale is as follows:
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Available For Sale Securities Continuous Unrealized Loss Position Fair Value [Table Text Block] | Securities which were temporarily impaired are shown below, along with the length of time in a continuous unrealized loss position.
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Investments Classified by Contractual Maturity Date [Table Text Block] | The table includes scheduled principal payments and estimated prepayments, based on observable market inputs, for agency mortgage-backed securities. Actual maturities will differ from contractual maturities because borrowers have the right to prepay obligations with or without prepayment penalties. Securities with no maturity are listed separately.
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Schedule of Realized Gain (Loss) [Table Text Block] | Sales proceeds and gross realized gains and losses on sales of available-for-sale securities are as follows for the periods indicated:
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Loans and Allowance for Loan Losses (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | Loans consisted of the following as of the dates indicated below:
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Allowance for Credit Losses on Financing Receivables [Table Text Block] | The following tables provide information on the Company’s allowance for loan losses by loan class and allowance methodology:
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Impaired Financing Receivables [Table Text Block] | The following tables present information on impaired loans:
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Past Due Financing Receivables [Table Text Block] | The following tables present information on the Company’s past due and non-accrual loans by loan class:
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Risk Categories By Loan Class [Table Text Block] | The following table provides information on the Company’s risk categories by loan class:
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Troubled Debt Restructurings on Financing Receivables [Table Text Block] | The following table presents information on loans that are classified as TDRs:
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Goodwill and Other Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets and Goodwill [Table Text Block] | A summary of the other intangible assets that continue to be subject to amortization is as follows:
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | The following sets forth estimated amortization expense for core deposit and lease intangible assets for the remainder of 2017 and in successive years ending December 31:
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Schedule of Participating Mortgage Loans [Table Text Block] | The following table provides information on the principal balances of mortgage loans serviced for others:
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Servicing Asset at Amortized Cost [Table Text Block] | Activity for mortgage servicing rights is as follows:
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Earnings per Share (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The shares used in the calculation of basic and diluted earnings per share are shown below:
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Repurchase Agreements (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Banking and Thrift [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Repurchase Agreements [Table Text Block] | The following is a summary of the balances and collateral of the Company’s repurchase agreements:
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Fair Value of Financial Instruments and Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, by Balance Sheet Grouping [Table Text Block] | Fair value estimates of the Company’s financial instruments as of March 31, 2017 and December 31, 2016, including methods and assumptions utilized, are set forth below:
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Fair Value, Assets Measured On Recurring Basis [Table Text Block] | The following tables represent the Company’s financial instruments that are measured at fair value on a recurring basis at March 31, 2017 and December 31, 2016, allocated to the appropriate fair value hierarchy:
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Schedule Of Fair Value Contractual Balance And Gain Loss On Loans Held For Sale [Table Text Block] | The aggregate fair value, contractual balance (including accrued interest), and gain on loans held for sale were as follows:
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Schedule of Gains and Losses from Changes in Fair Value of Loans Held for Sale [Table Text Block] | The total amount of gains from changes in fair value of loans held for sale included in earnings were as follows:
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Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques [Table Text Block] | The following tables represent the Company’s financial instruments that are measured at fair value on a non-recurring basis as of March 31, 2017 and December 31, 2016 allocated to the appropriate fair value hierarchy:
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Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block] | The following table presents quantitative information about Level 3 fair value measurements measured at fair value on a non-recurring basis as of March 31, 2017 and December 31, 2016.
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Regulatory Capital Requirements (Tables) |
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Banking and Thrift [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Compliance with Regulatory Capital Requirements for Mortgage Companies [Table Text Block] | The following is a comparison of the Company’s regulatory capital to minimum capital requirements at March 31, 2017 and December 31, 2016:
(1) The required ratios for capital adequacy purposes include a capital conservation buffer of 1.25% for March 31, 2017 and 0.625% for December 31, 2016. |
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Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations [Table Text Block] | The following is a comparison of the Bank’s regulatory capital to minimum capital requirements at March 31, 2017 and December 31, 2016:
(1) The required ratios for capital adequacy purposes include a capital conservation buffer of 1.25% for March 31, 2017 and 0.625% for December 31, 2016. |
Investments (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
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Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | $ 398,715 | $ 387,733 |
Gross unrealized gains | 1,958 | 2,038 |
Gross unrealized losses | (3,753) | (4,208) |
Estimated fair value | 396,920 | 385,563 |
U. S. treasury securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 4,990 | 6,005 |
Gross unrealized gains | 8 | 10 |
Gross unrealized losses | 0 | 0 |
Estimated fair value | 4,998 | 6,015 |
Common stocks [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 376 | 458 |
Gross unrealized gains | 387 | 650 |
Gross unrealized losses | 0 | 0 |
Estimated fair value | 763 | 1,108 |
U. S. federal agency obligations [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 21,419 | 27,140 |
Gross unrealized gains | 44 | 48 |
Gross unrealized losses | (40) | (49) |
Estimated fair value | 21,423 | 27,139 |
Municipal obligations, tax exempt [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 176,646 | 163,632 |
Gross unrealized gains | 893 | 696 |
Gross unrealized losses | (2,389) | (2,666) |
Estimated fair value | 175,150 | 161,662 |
Municipal obligations, taxable [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 67,954 | 71,371 |
Gross unrealized gains | 468 | 463 |
Gross unrealized losses | (257) | (271) |
Estimated fair value | 68,165 | 71,563 |
Agency mortgage-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 118,606 | 109,427 |
Gross unrealized gains | 158 | 171 |
Gross unrealized losses | (1,067) | (1,222) |
Estimated fair value | 117,697 | 108,376 |
Certificates of deposit [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 8,724 | 9,700 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Estimated fair value | $ 8,724 | $ 9,700 |
Investments (Details 1) $ in Thousands |
Mar. 31, 2017
USD ($)
Number
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Dec. 31, 2016
USD ($)
Number
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Schedule of Available-for-sale Securities [Line Items] | ||
No. of securities | Number | 359 | 408 |
Fair value, Less than 12 months | $ 216,600 | $ 222,093 |
Unrealized losses, Less than 12 months | (3,753) | (4,208) |
Fair value, 12 months or longer | 0 | 0 |
Unrealized losses, 12 months or longer | 0 | 0 |
Total, Fair value | 216,600 | 222,093 |
Total, Unrealized losses | $ (3,753) | $ (4,208) |
U.S. federal agency obligations [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
No. of securities | Number | 9 | 9 |
Fair value, Less than 12 months | $ 11,841 | $ 15,056 |
Unrealized losses, Less than 12 months | (40) | (49) |
Fair value, 12 months or longer | 0 | 0 |
Unrealized losses, 12 months or longer | 0 | 0 |
Total, Fair value | 11,841 | 15,056 |
Total, Unrealized losses | $ (40) | $ (49) |
Municipal obligations, tax exempt [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
No. of securities | Number | 237 | 275 |
Fair value, Less than 12 months | $ 95,197 | $ 97,842 |
Unrealized losses, Less than 12 months | (2,389) | (2,666) |
Fair value, 12 months or longer | 0 | 0 |
Unrealized losses, 12 months or longer | 0 | 0 |
Total, Fair value | 95,197 | 97,842 |
Total, Unrealized losses | $ (2,389) | $ (2,666) |
Municipal obligations, taxable [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
No. of securities | Number | 66 | 66 |
Fair value, Less than 12 months | $ 27,071 | $ 26,184 |
Unrealized losses, Less than 12 months | (257) | (271) |
Fair value, 12 months or longer | 0 | 0 |
Unrealized losses, 12 months or longer | 0 | 0 |
Total, Fair value | 27,071 | 26,184 |
Total, Unrealized losses | $ (257) | $ (271) |
Agency mortgage-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
No. of securities | Number | 47 | 58 |
Fair value, Less than 12 months | $ 82,491 | $ 83,011 |
Unrealized losses, Less than 12 months | (1,067) | (1,222) |
Fair value, 12 months or longer | 0 | 0 |
Unrealized losses, 12 months or longer | 0 | 0 |
Total, Fair value | 82,491 | 83,011 |
Total, Unrealized losses | $ (1,067) | $ (1,222) |
Investments (Details 2) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
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Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost, Due in less than one year | $ 29,722 | |
Amortized cost, Due after one year but within five years | 199,365 | |
Amortized cost, Due after five years but within ten years | 83,169 | |
Amortized cost, Due after ten years | 86,083 | |
Amortized cost, Common stocks | 376 | |
Amortized cost, Total | 398,715 | $ 387,733 |
Estimated fair value, Due in less than one year | 29,755 | |
Estimated fair value, Due after one year but within five years | 198,758 | |
Estimated fair value, Due after five years but within ten years | 82,960 | |
Estimated fair value, Due after ten years | 84,684 | |
Estimated fair value, Common stocks | 763 | |
Estimated fair value, Total | $ 396,920 | $ 385,563 |
Investments (Details 3) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2017 |
Mar. 31, 2016 |
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Schedule of Available-for-sale Securities [Line Items] | ||
Sales proceeds | $ 11,797 | $ 1,817 |
Realized gains | 171 | 16 |
Realized losses | (24) | (4) |
Net realized gains | $ 147 | $ 12 |
Investments (Details Textual) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
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Schedule of Available-for-sale Securities [Line Items] | ||
Security Owned and Pledged as Collateral, Fair Value, Total | $ 217.5 | $ 224.3 |
Equity Method Investment, Ownership Percentage | 10.00% |
Loans and Allowance for Loan Losses (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
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Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total gross loans | $ 423,409 | $ 425,769 | ||
Net deferred loan costs and loans in process | (127) | 36 | ||
Allowance for loan losses | (5,327) | (5,344) | $ (5,869) | $ (5,922) |
Loans, net | 417,955 | 420,461 | ||
Residential Real Estate [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total gross loans | 137,301 | 136,846 | ||
Allowance for loan losses | (493) | (504) | (864) | (925) |
Loans, net | 137,301 | 136,846 | ||
Construction Loans [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total gross loans | 16,329 | 13,738 | ||
Allowance for loan losses | (71) | (53) | (82) | (77) |
Loans, net | 16,329 | 13,738 | ||
Commercial Real Estate [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total gross loans | 114,759 | 118,200 | ||
Allowance for loan losses | (1,740) | (1,777) | (1,831) | (1,740) |
Loans, net | 114,759 | 118,200 | ||
Commercial [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total gross loans | 54,102 | 54,506 | ||
Allowance for loan losses | (1,101) | (1,119) | (1,384) | (1,530) |
Loans, net | 54,102 | 54,506 | ||
Agriculture [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total gross loans | 76,124 | 78,324 | ||
Allowance for loan losses | (1,731) | (1,684) | (1,483) | (1,428) |
Loans, net | 76,124 | 78,324 | ||
Municipal Bonds [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total gross loans | 3,706 | 3,884 | ||
Allowance for loan losses | (11) | (12) | (24) | (23) |
Loans, net | 3,706 | 3,884 | ||
Consumer [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total gross loans | 21,088 | 20,271 | ||
Allowance for loan losses | (180) | (195) | $ (201) | $ (199) |
Loans, net | $ 21,088 | $ 20,271 |
Loans and Allowance for Loan Losses (Details 1) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2017 |
Dec. 31, 2016 |
|
Allowance for loan losses: | ||||
Balance | $ 5,344 | $ 5,922 | ||
Charge-offs | (126) | (137) | ||
Recoveries | 59 | 34 | ||
Provision for loan losses | 50 | 50 | ||
Balance | 5,327 | 5,869 | ||
Allowance for loan losses: | ||||
Individually evaluated for loss | $ 308 | $ 274 | ||
Collectively evaluated for loss | 5,019 | 5,070 | ||
Total | 5,327 | 5,922 | 5,327 | 5,344 |
Loan balances: | ||||
Individually evaluated for loss | 6,516 | 6,728 | ||
Collectively evaluated for loss | 416,893 | 419,041 | ||
Total | 417,955 | 420,461 | ||
Residential Real Estate [Member] | ||||
Allowance for loan losses: | ||||
Balance | 504 | 925 | ||
Charge-offs | (19) | 0 | ||
Recoveries | 1 | 2 | ||
Provision for loan losses | 7 | (63) | ||
Balance | 493 | 864 | ||
Allowance for loan losses: | ||||
Individually evaluated for loss | 0 | 0 | ||
Collectively evaluated for loss | 493 | 504 | ||
Total | 504 | 925 | 493 | 504 |
Loan balances: | ||||
Individually evaluated for loss | 665 | 780 | ||
Collectively evaluated for loss | 136,636 | 136,066 | ||
Total | 137,301 | 136,846 | ||
Construction Loans [Member] | ||||
Allowance for loan losses: | ||||
Balance | 53 | 77 | ||
Charge-offs | 0 | 0 | ||
Recoveries | 0 | 0 | ||
Provision for loan losses | 18 | 5 | ||
Balance | 71 | 82 | ||
Allowance for loan losses: | ||||
Individually evaluated for loss | 0 | 0 | ||
Collectively evaluated for loss | 71 | 53 | ||
Total | 53 | 77 | 71 | 53 |
Loan balances: | ||||
Individually evaluated for loss | 1,851 | 1,937 | ||
Collectively evaluated for loss | 14,478 | 11,801 | ||
Total | 16,329 | 13,738 | ||
Commercial Real Estate [Member] | ||||
Allowance for loan losses: | ||||
Balance | 1,777 | 1,740 | ||
Charge-offs | 0 | 0 | ||
Recoveries | 0 | 0 | ||
Provision for loan losses | (37) | 91 | ||
Balance | 1,740 | 1,831 | ||
Allowance for loan losses: | ||||
Individually evaluated for loss | 106 | 81 | ||
Collectively evaluated for loss | 1,634 | 1,696 | ||
Total | 1,777 | 1,740 | 1,740 | 1,777 |
Loan balances: | ||||
Individually evaluated for loss | 2,437 | 2,445 | ||
Collectively evaluated for loss | 112,322 | 115,755 | ||
Total | 114,759 | 118,200 | ||
Commercial [Member] | ||||
Allowance for loan losses: | ||||
Balance | 1,119 | 1,530 | ||
Charge-offs | 0 | 0 | ||
Recoveries | 8 | 19 | ||
Provision for loan losses | (26) | (165) | ||
Balance | 1,101 | 1,384 | ||
Allowance for loan losses: | ||||
Individually evaluated for loss | 70 | 87 | ||
Collectively evaluated for loss | 1,031 | 1,032 | ||
Total | 1,119 | 1,530 | 1,101 | 1,119 |
Loan balances: | ||||
Individually evaluated for loss | 320 | 355 | ||
Collectively evaluated for loss | 53,782 | 54,151 | ||
Total | 54,102 | 54,506 | ||
Agriculture [Member] | ||||
Allowance for loan losses: | ||||
Balance | 1,684 | 1,428 | ||
Charge-offs | 0 | 0 | ||
Recoveries | 1 | 0 | ||
Provision for loan losses | 46 | 55 | ||
Balance | 1,731 | 1,483 | ||
Allowance for loan losses: | ||||
Individually evaluated for loss | 132 | 89 | ||
Collectively evaluated for loss | 1,599 | 1,595 | ||
Total | 1,684 | 1,428 | 1,731 | 1,684 |
Loan balances: | ||||
Individually evaluated for loss | 983 | 881 | ||
Collectively evaluated for loss | 75,141 | 77,443 | ||
Total | 76,124 | 78,324 | ||
Municipal Bonds [Member] | ||||
Allowance for loan losses: | ||||
Balance | 12 | 23 | ||
Charge-offs | 0 | 0 | ||
Recoveries | 0 | 0 | ||
Provision for loan losses | (1) | 1 | ||
Balance | 11 | 24 | ||
Allowance for loan losses: | ||||
Individually evaluated for loss | 0 | 0 | ||
Collectively evaluated for loss | 11 | 12 | ||
Total | 12 | 23 | 11 | 12 |
Loan balances: | ||||
Individually evaluated for loss | 221 | 258 | ||
Collectively evaluated for loss | 3,485 | 3,626 | ||
Total | 3,706 | 3,884 | ||
Consumer [Member] | ||||
Allowance for loan losses: | ||||
Balance | 195 | 199 | ||
Charge-offs | (107) | (137) | ||
Recoveries | 49 | 13 | ||
Provision for loan losses | 43 | 126 | ||
Balance | 180 | 201 | ||
Allowance for loan losses: | ||||
Individually evaluated for loss | 0 | 17 | ||
Collectively evaluated for loss | 180 | 178 | ||
Total | $ 195 | $ 199 | 180 | 195 |
Loan balances: | ||||
Individually evaluated for loss | 39 | 72 | ||
Collectively evaluated for loss | 21,049 | 20,199 | ||
Total | $ 21,088 | $ 20,271 |
Loans and Allowance for Loan Losses (Details 2) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
|
Financing Receivable, Impaired [Line Items] | ||
Unpaid contractual principal | $ 8,466 | $ 8,755 |
Impaired loan balance | 6,516 | 6,728 |
Impaired loans without an allowance | 5,058 | 5,368 |
Impaired loans with an allowance | 1,458 | 1,360 |
Related allowance recorded | 308 | 274 |
Year-to-date average loan balance | 6,635 | 7,374 |
Year-to-date interest income recognized | 145 | 601 |
Residential Real Estate [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Unpaid contractual principal | 665 | 780 |
Impaired loan balance | 665 | 780 |
Impaired loans without an allowance | 665 | 780 |
Impaired loans with an allowance | 0 | 0 |
Related allowance recorded | 0 | 0 |
Year-to-date average loan balance | 669 | 798 |
Year-to-date interest income recognized | 2 | 7 |
Construction Loans [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Unpaid contractual principal | 3,586 | 3,672 |
Impaired loan balance | 1,851 | 1,937 |
Impaired loans without an allowance | 1,851 | 1,937 |
Impaired loans with an allowance | 0 | 0 |
Related allowance recorded | 0 | 0 |
Year-to-date average loan balance | 1,899 | 2,068 |
Year-to-date interest income recognized | 16 | 72 |
Commercial Real Estate [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Unpaid contractual principal | 2,437 | 2,445 |
Impaired loan balance | 2,437 | 2,445 |
Impaired loans without an allowance | 2,151 | 2,145 |
Impaired loans with an allowance | 286 | 300 |
Related allowance recorded | 106 | 81 |
Year-to-date average loan balance | 2,449 | 2,587 |
Year-to-date interest income recognized | 124 | 505 |
Commercial [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Unpaid contractual principal | 320 | 355 |
Impaired loan balance | 320 | 355 |
Impaired loans without an allowance | 29 | 46 |
Impaired loans with an allowance | 291 | 309 |
Related allowance recorded | 70 | 87 |
Year-to-date average loan balance | 332 | 425 |
Year-to-date interest income recognized | 0 | 2 |
Agriculture [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Unpaid contractual principal | 1,198 | 1,173 |
Impaired loan balance | 983 | 881 |
Impaired loans without an allowance | 102 | 147 |
Impaired loans with an allowance | 881 | 734 |
Related allowance recorded | 132 | 89 |
Year-to-date average loan balance | 996 | 1,000 |
Year-to-date interest income recognized | 1 | 2 |
Municipal [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Unpaid contractual principal | 221 | 258 |
Impaired loan balance | 221 | 258 |
Impaired loans without an allowance | 221 | 258 |
Impaired loans with an allowance | 0 | 0 |
Related allowance recorded | 0 | 0 |
Year-to-date average loan balance | 251 | 418 |
Year-to-date interest income recognized | 2 | 0 |
Consumer [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Unpaid contractual principal | 39 | 72 |
Impaired loan balance | 39 | 72 |
Impaired loans without an allowance | 39 | 55 |
Impaired loans with an allowance | 0 | 17 |
Related allowance recorded | 0 | 17 |
Year-to-date average loan balance | 39 | 78 |
Year-to-date interest income recognized | $ 0 | $ 13 |
Loans and Allowance for Loan Losses (Details 3) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
|
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, 90 days or more delinquent and accruing | $ 0 | $ 0 |
Loans, Total past due loans accruing | 1,372 | 758 |
Loans, Non-accrual loans | 2,660 | 2,746 |
Loan, Total past due and non-accrual loans | 4,032 | 3,504 |
Loan, Total loans not past due | $ 419,377 | $ 422,265 |
Percent of gross loans, 30-59 days delinquent and accruing | 0.20% | 0.09% |
Percent of gross loans, 60-89 days delinquent and accruing | 0.12% | 0.09% |
Percent of gross loans, 90 days or more delinquent and accruing | 0.00% | 0.00% |
Percentage of gross loans, Total past due loans accruing | 0.32% | 0.18% |
Percent of gross loans, Non-accrual loans | 0.63% | 0.64% |
Percentage of Total past due and non-accrual loans | 0.95% | 0.82% |
Percentage of Total loans not past due | 99.05% | 99.18% |
Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | $ 852 | $ 362 |
Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 520 | 396 |
Residential Real Estate [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, 90 days or more delinquent and accruing | 0 | 0 |
Loans, Total past due loans accruing | 426 | 603 |
Loans, Non-accrual loans | 484 | 595 |
Loan, Total past due and non-accrual loans | 910 | 1,198 |
Loan, Total loans not past due | 136,391 | 135,648 |
Residential Real Estate [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 334 | 215 |
Residential Real Estate [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 92 | 388 |
Construction Loans [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, 90 days or more delinquent and accruing | 0 | 0 |
Loans, Total past due loans accruing | 0 | 0 |
Loans, Non-accrual loans | 595 | 599 |
Loan, Total past due and non-accrual loans | 595 | 599 |
Loan, Total loans not past due | 15,734 | 13,139 |
Construction Loans [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Construction Loans [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Commercial Real Estate [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, 90 days or more delinquent and accruing | 0 | 0 |
Loans, Total past due loans accruing | 329 | 0 |
Loans, Non-accrual loans | 286 | 300 |
Loan, Total past due and non-accrual loans | 615 | 300 |
Loan, Total loans not past due | 114,144 | 117,900 |
Commercial Real Estate [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 260 | 0 |
Commercial Real Estate [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 69 | 0 |
Commercial [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, 90 days or more delinquent and accruing | 0 | 0 |
Loans, Total past due loans accruing | 173 | 18 |
Loans, Non-accrual loans | 316 | 342 |
Loan, Total past due and non-accrual loans | 489 | 360 |
Loan, Total loans not past due | 53,613 | 54,146 |
Commercial [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 160 | 13 |
Commercial [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 13 | 5 |
Agriculture [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, 90 days or more delinquent and accruing | 0 | 0 |
Loans, Total past due loans accruing | 386 | 55 |
Loans, Non-accrual loans | 940 | 838 |
Loan, Total past due and non-accrual loans | 1,326 | 893 |
Loan, Total loans not past due | 74,798 | 77,431 |
Agriculture [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 58 | 55 |
Agriculture [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 328 | 0 |
Municipal [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, 90 days or more delinquent and accruing | 0 | 0 |
Loans, Total past due loans accruing | 0 | 0 |
Loans, Non-accrual loans | 0 | 0 |
Loan, Total past due and non-accrual loans | 0 | 0 |
Loan, Total loans not past due | 3,706 | 3,884 |
Municipal [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Municipal [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Consumer [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans, 90 days or more delinquent and accruing | 0 | 0 |
Loans, Total past due loans accruing | 58 | 82 |
Loans, Non-accrual loans | 39 | 72 |
Loan, Total past due and non-accrual loans | 97 | 154 |
Loan, Total loans not past due | 20,991 | 20,117 |
Consumer [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 40 | 79 |
Consumer [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | $ 18 | $ 3 |
Loans and Allowance for Loan Losses (Details 4) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Financing Receivable, Modifications [Line Items] | ||
Loans and Leases Receivable, Gross, Total | $ 423,409 | $ 425,769 |
Loans Receivables Non Classified [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Loans and Leases Receivable, Gross, Total | 407,138 | 409,128 |
Loans Receivables Classified [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Loans and Leases Receivable, Gross, Total | 16,271 | 16,641 |
Residential Real Estate [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Loans and Leases Receivable, Gross, Total | 137,301 | 136,846 |
Residential Real Estate [Member] | Loans Receivables Non Classified [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Loans and Leases Receivable, Gross, Total | 136,143 | 135,640 |
Residential Real Estate [Member] | Loans Receivables Classified [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Loans and Leases Receivable, Gross, Total | 1,158 | 1,206 |
Construction Loans [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Loans and Leases Receivable, Gross, Total | 16,329 | 13,738 |
Construction Loans [Member] | Loans Receivables Non Classified [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Loans and Leases Receivable, Gross, Total | 15,734 | 13,138 |
Construction Loans [Member] | Loans Receivables Classified [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Loans and Leases Receivable, Gross, Total | 595 | 600 |
Commercial Real Estate [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Loans and Leases Receivable, Gross, Total | 114,759 | 118,200 |
Commercial Real Estate [Member] | Loans Receivables Non Classified [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Loans and Leases Receivable, Gross, Total | 108,527 | 111,641 |
Commercial Real Estate [Member] | Loans Receivables Classified [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Loans and Leases Receivable, Gross, Total | 6,232 | 6,559 |
Commercial [Member] | Loans Receivables Non Classified [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Loans and Leases Receivable, Gross, Total | 50,614 | 51,080 |
Commercial [Member] | Loans Receivables Classified [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Loans and Leases Receivable, Gross, Total | 3,488 | 3,426 |
Municipal [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Loans and Leases Receivable, Gross, Total | 3,706 | 3,884 |
Municipal [Member] | Loans Receivables Non Classified [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Loans and Leases Receivable, Gross, Total | 3,706 | 3,884 |
Municipal [Member] | Loans Receivables Classified [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Loans and Leases Receivable, Gross, Total | 0 | 0 |
Agriculture [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Loans and Leases Receivable, Gross, Total | 76,124 | 78,324 |
Agriculture [Member] | Loans Receivables Non Classified [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Loans and Leases Receivable, Gross, Total | 71,377 | 73,564 |
Agriculture [Member] | Loans Receivables Classified [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Loans and Leases Receivable, Gross, Total | 4,747 | 4,760 |
Consumer [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Loans and Leases Receivable, Gross, Total | 21,088 | 20,271 |
Consumer [Member] | Loans Receivables Non Classified [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Loans and Leases Receivable, Gross, Total | 21,037 | 20,181 |
Consumer [Member] | Loans Receivables Classified [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Loans and Leases Receivable, Gross, Total | $ 51 | $ 90 |
Loans and Allowance for Loan Losses (Details 5) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2017
USD ($)
Number
|
Dec. 31, 2016
USD ($)
Number
|
|
Financing Receivable, Modifications, Recorded Investment, Non Accrual Balance | $ 2,660 | $ 2,746 |
Troubled Debt Restructurings [Member] | ||
Troubled debt restructurings, Number of loans | Number | 18 | 17 |
Financing Receivable, Modifications, Recorded Investment, Non Accrual Balance | $ 901 | $ 920 |
Financing Receivable, Modifications, Recorded Investment, Accruing Balance | $ 3,856 | $ 3,983 |
Municipal [Member] | Troubled Debt Restructurings [Member] | ||
Troubled debt restructurings, Number of loans | Number | 2 | 2 |
Financing Receivable, Modifications, Recorded Investment, Non Accrual Balance | $ 0 | $ 0 |
Financing Receivable, Modifications, Recorded Investment, Accruing Balance | 221 | 258 |
Commercial [Member] | ||
Financing Receivable, Modifications, Recorded Investment, Non Accrual Balance | $ 316 | $ 342 |
Commercial [Member] | Troubled Debt Restructurings [Member] | ||
Troubled debt restructurings, Number of loans | Number | 1 | 2 |
Financing Receivable, Modifications, Recorded Investment, Non Accrual Balance | $ 0 | $ 0 |
Financing Receivable, Modifications, Recorded Investment, Accruing Balance | $ 3 | $ 13 |
Construction Loans [Member] | Troubled Debt Restructurings [Member] | ||
Troubled debt restructurings, Number of loans | Number | 4 | 4 |
Financing Receivable, Modifications, Recorded Investment, Non Accrual Balance | $ 583 | $ 588 |
Financing Receivable, Modifications, Recorded Investment, Accruing Balance | $ 1,256 | $ 1,338 |
Agriculture [Member] | Troubled Debt Restructurings [Member] | ||
Troubled debt restructurings, Number of loans | Number | 5 | 4 |
Financing Receivable, Modifications, Recorded Investment, Non Accrual Balance | $ 268 | $ 268 |
Financing Receivable, Modifications, Recorded Investment, Accruing Balance | 44 | 44 |
Residential Real Estate [Member] | ||
Financing Receivable, Modifications, Recorded Investment, Non Accrual Balance | $ 484 | $ 595 |
Residential Real Estate [Member] | Troubled Debt Restructurings [Member] | ||
Troubled debt restructurings, Number of loans | Number | 2 | 2 |
Financing Receivable, Modifications, Recorded Investment, Non Accrual Balance | $ 0 | $ 0 |
Financing Receivable, Modifications, Recorded Investment, Accruing Balance | 181 | 185 |
Commercial Real Estate [Member] | ||
Financing Receivable, Modifications, Recorded Investment, Non Accrual Balance | $ 286 | $ 300 |
Commercial Real Estate [Member] | Troubled Debt Restructurings [Member] | ||
Troubled debt restructurings, Number of loans | Number | 4 | 3 |
Financing Receivable, Modifications, Recorded Investment, Non Accrual Balance | $ 50 | $ 64 |
Financing Receivable, Modifications, Recorded Investment, Accruing Balance | $ 2,151 | $ 2,145 |
Loans and Allowance for Loan Losses (Details Textual) - USD ($) |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Impaired Financing Receivable Loan Balance Charged Off | $ 67,000 | $ 103,000 | ||
Loans and Leases Receivable, Impaired, Interest Lost on Nonaccrual Loans | 31,000 | 33,000 | ||
Impaired Financing Receivable, Recorded Investment, Total | 6,516,000 | $ 6,728,000 | ||
Loans and Leases Receivable, Allowance | 5,327,000 | $ 5,869,000 | 5,344,000 | $ 5,922,000 |
Provision For Loan Losses Reversal | 13,000 | |||
Trouble Debt Restructurings [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans Receivable, Gross, Commercial, Real Estate, Total | 11,000 | |||
Loans Receivable, Gross, Commercial, Agricultural | 44,000 | 15,000 | ||
Loans and Leases Receivable, Allowance | 67,000 | 80,000 | ||
Construction Loans [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans and Leases Receivable, Impaired, Commitment to Lend | 84,000 | |||
Minimum [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Impaired Financing Receivable, Recorded Investment, Total | $ 6,700,000 | |||
Maximum [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Impaired Financing Receivable, Recorded Investment, Total | $ 6,500,000 |
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross carrying amount | $ 8,290 | $ 8,205 |
Intangible assets, Accumulated amortization | (4,441) | (4,219) |
Intangible assets, Net carrying amount | 3,849 | 3,986 |
Core deposit intangible assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross carrying amount | 2,067 | 2,067 |
Intangible assets, Accumulated amortization | (1,201) | (1,137) |
Intangible assets, Net carrying amount | 866 | 930 |
Lease intangible asset [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross carrying amount | 350 | 350 |
Intangible assets, Accumulated amortization | (154) | (143) |
Intangible assets, Net carrying amount | 196 | 207 |
Mortgage servicing rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross carrying amount | 5,873 | 5,788 |
Intangible assets, Accumulated amortization | (3,086) | (2,939) |
Intangible assets, Net carrying amount | $ 2,787 | $ 2,849 |
Goodwill and Other Intangible Assets (Details 1) $ in Thousands |
Mar. 31, 2017
USD ($)
|
---|---|
Finite-Lived Intangible Assets [Line Items] | |
Remainder of 2017 | $ 214 |
2018 | 252 |
2019 | 214 |
2020 | 177 |
2021 | 121 |
Thereafter | 84 |
Total | $ 1,062 |
Goodwill and Other Intangible Assets (Details 2) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage Loans on Real Estate, Face Amount of Mortgages | $ 498,841 | $ 494,749 |
FHLMC [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage Loans on Real Estate, Face Amount of Mortgages | 487,990 | 483,356 |
FHLB [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage Loans on Real Estate, Face Amount of Mortgages | $ 10,851 | $ 11,393 |
Goodwill and Other Intangible Assets (Details 3) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Mortgage servicing rights: | ||
Balance at beginning of period | $ 2,849 | $ 2,840 |
Additions | 161 | 221 |
Amortization | (223) | (253) |
Balance at end of period | $ 2,787 | $ 2,808 |
Goodwill and Other Intangible Assets (Details Textual) - USD ($) |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
|
Weighted Average [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Assumption For Fair Value Of Interests Continued To Be Held By Transferor Servicing Assets Or Liabilities Weighted Average Default Rate | 2.24% | 2.26% | |
Mortgage Loans Serviced [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Escrow Deposit | $ 7,200,000 | $ 4,100,000 | |
Interest and Fee Income, Other Loans | 319,000 | $ 300,000 | |
Servicing Asset at Fair Value, Amount | 5,400,000 | 5,100,000 | |
Mortgage Loans on Real Estate, Other Deductions | $ 70,000 | ||
Financing Receivable, Allowance for Credit Losses, Recovery | $ 7,000 | ||
Mortgage Loans Serviced [Member] | Minimum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Assumption for Fair Value of Assets or Liabilities that relate to Transferor's Continuing Involvement, Discount Rate | 9.50% | 9.50% | |
Assumption for Fair Value of Assets or Liabilities that relate to Transferor's Continuing Involvement, Prepayment Speed | 4.39% | 4.86% | |
Mortgage Loans Serviced [Member] | Maximum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Assumption for Fair Value of Assets or Liabilities that relate to Transferor's Continuing Involvement, Discount Rate | 9.51% | 9.51% | |
Assumption for Fair Value of Assets or Liabilities that relate to Transferor's Continuing Involvement, Prepayment Speed | 33.19% | 32.79% | |
Mortgage Repurchase Reserve [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Mortgage Loans on Real Estate, Write-down or Reserve, Amount | $ 301,000 | $ 301,000 |
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|||||||||||||||||
Net earnings | [1],[2],[3],[4] | $ 2,205 | $ 2,393 | [5] | ||||||||||||||
Weighted average common shares outstanding - basic | [6] | 3,869,799 | 3,734,638 | |||||||||||||||
Assumed exercise of stock options | [4],[6] | 79,149 | 100,200 | |||||||||||||||
Weighted average common shares outstanding - diluted | [4],[6] | 3,948,948 | 3,834,838 | |||||||||||||||
Net earnings per share: | ||||||||||||||||||
Basic | [4],[6],[7] | $ 0.57 | $ 0.64 | |||||||||||||||
Diluted | [1],[4],[6],[7] | $ 0.56 | $ 0.63 | |||||||||||||||
|
Earnings per Share (Details Textual) |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2016 |
Dec. 31, 2016 |
||||
Percentage Of Stocks Dividend | 5.00% | [1] | 5.00% | ||
|
Repurchase Agreements (Details) - USD ($) |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Assets Sold under Agreements to Repurchase [Line Items] | ||
Assets Sold under Agreements to Repurchase, Carrying Amount | $ 13,491 | $ 12,483 |
US Government Corporations and Agencies Securities [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Assets Sold under Agreements to Repurchase, Carrying Amount | 2,564 | 5,007 |
US Government Agencies Debt Securities [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Assets Sold under Agreements to Repurchase, Carrying Amount | 10,927 | 7,476 |
Maturity Overnight [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Assets Sold under Agreements to Repurchase, Carrying Amount | 13,491 | 12,483 |
Maturity Overnight [Member] | US Government Corporations and Agencies Securities [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Assets Sold under Agreements to Repurchase, Carrying Amount | 2,564 | 5,007 |
Maturity Overnight [Member] | US Government Agencies Debt Securities [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Assets Sold under Agreements to Repurchase, Carrying Amount | 10,927 | 7,476 |
Maturity Less than 30 Days [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Assets Sold under Agreements to Repurchase, Carrying Amount | 0 | 0 |
Maturity Less than 30 Days [Member] | US Government Corporations and Agencies Securities [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Assets Sold under Agreements to Repurchase, Carrying Amount | 0 | 0 |
Maturity Less than 30 Days [Member] | US Government Agencies Debt Securities [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Assets Sold under Agreements to Repurchase, Carrying Amount | 0 | 0 |
Maturity 30 to 90 Days [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Assets Sold under Agreements to Repurchase, Carrying Amount | 0 | 0 |
Maturity 30 to 90 Days [Member] | US Government Corporations and Agencies Securities [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Assets Sold under Agreements to Repurchase, Carrying Amount | 0 | 0 |
Maturity 30 to 90 Days [Member] | US Government Agencies Debt Securities [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Assets Sold under Agreements to Repurchase, Carrying Amount | 0 | 0 |
Maturity Greater than 90 Days [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Assets Sold under Agreements to Repurchase, Carrying Amount | 0 | 0 |
Maturity Greater than 90 Days [Member] | US Government Corporations and Agencies Securities [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Assets Sold under Agreements to Repurchase, Carrying Amount | 0 | 0 |
Maturity Greater than 90 Days [Member] | US Government Agencies Debt Securities [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Assets Sold under Agreements to Repurchase, Carrying Amount | $ 0 | $ 0 |
Repurchase Agreements (Details Textual) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Assets Sold under Agreements to Repurchase [Line Items] | ||
Customer Funds | $ 13.5 | $ 12.5 |
Repurchase Agreements [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Debt Instrument, Collateral Amount | $ 19.7 | $ 15.7 |
Fair Value of Financial Instruments and Fair Value Measurements (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|---|---|
Financial assets: | ||||
Cash and cash equivalents, carrying amount | $ 20,062 | $ 19,996 | $ 9,853 | $ 13,569 |
Cash and cash equivalents | 20,062 | 19,996 | ||
Investment securities available for sale | 396,920 | 385,563 | ||
Bank stocks, at cost, carrying amount | 5,323 | 5,299 | ||
Loans, net | 416,130 | 417,957 | ||
Loans held for sale | 8,588 | 5,517 | ||
Loans, net, carrying amount | 417,955 | 420,461 | ||
Loans held for sale, net, carrying amount | 8,588 | 5,517 | ||
Derivative financial instruments | 966 | 662 | ||
Accrued interest receivable | 3,874 | 4,240 | ||
Financial liabilities: | ||||
Time deposits, carrying amount | (139,197) | (139,838) | ||
FHLB borrowings, carrying amount | (33,450) | (39,100) | ||
Subordinated debentures, carrying amount | (21,334) | (21,284) | ||
Other borrowings, carrying amount | (13,491) | (12,483) | ||
Non-maturity deposits | (613,489) | (601,683) | ||
Time deposits | (137,820) | (138,623) | ||
FHLB borrowings | (33,967) | (35,695) | ||
Subordinated debentures | (18,731) | (18,608) | ||
Other borrowings | (13,491) | (12,483) | ||
Derivative financial instruments | (154) | |||
Accrued interest payable | (253) | (268) | ||
Fair Value, Inputs, Level 1 [Member] | ||||
Financial assets: | ||||
Cash and cash equivalents | 20,062 | 19,996 | ||
Investment securities available for sale | 5,761 | 7,123 | ||
Loans, net | 0 | 0 | ||
Loans held for sale | 0 | 0 | ||
Derivative financial instruments | 0 | 0 | ||
Accrued interest receivable | 16 | 21 | ||
Financial liabilities: | ||||
Non-maturity deposits | (613,489) | (601,683) | ||
Time deposits | 0 | 0 | ||
FHLB borrowings | 0 | 0 | ||
Subordinated debentures | 0 | 0 | ||
Other borrowings | 0 | 0 | ||
Derivative financial instruments | 0 | |||
Accrued interest payable | 0 | 0 | ||
Fair Value, Inputs, Level 2 [Member] | ||||
Financial assets: | ||||
Cash and cash equivalents | 0 | 0 | ||
Investment securities available for sale | 391,159 | 378,440 | ||
Loans, net | 0 | 0 | ||
Loans held for sale | 8,588 | 5,517 | ||
Derivative financial instruments | 966 | 662 | ||
Accrued interest receivable | 2,067 | 2,104 | ||
Financial liabilities: | ||||
Non-maturity deposits | 0 | 0 | ||
Time deposits | (137,820) | (138,623) | ||
FHLB borrowings | (33,967) | (35,695) | ||
Subordinated debentures | (18,731) | (18,608) | ||
Other borrowings | (13,491) | (12,483) | ||
Derivative financial instruments | (154) | |||
Accrued interest payable | (253) | (268) | ||
Fair Value, Inputs, Level 3 [Member] | ||||
Financial assets: | ||||
Cash and cash equivalents | 0 | 0 | ||
Investment securities available for sale | 0 | 0 | ||
Loans, net | 416,130 | 417,957 | ||
Loans held for sale | 0 | 0 | ||
Derivative financial instruments | 0 | 0 | ||
Accrued interest receivable | 1,791 | 2,115 | ||
Financial liabilities: | ||||
Non-maturity deposits | 0 | 0 | ||
Time deposits | 0 | 0 | ||
FHLB borrowings | 0 | 0 | ||
Subordinated debentures | 0 | 0 | ||
Other borrowings | 0 | 0 | ||
Derivative financial instruments | 0 | |||
Accrued interest payable | 0 | 0 | ||
Carrying Amount, Fair Value Disclosure [Member] | ||||
Financial assets: | ||||
Cash and cash equivalents, carrying amount | 20,062 | 19,996 | ||
Investment securities available for sale | 396,920 | 385,563 | ||
Bank stocks, at cost, carrying amount | 5,323 | 5,299 | ||
Loans held for sale | 5,517 | |||
Loans, net, carrying amount | 417,955 | 420,461 | ||
Loans held for sale, net, carrying amount | 8,588 | |||
Derivative financial instruments | 966 | 662 | ||
Accrued interest receivable, carrying amount | 3,874 | 4,240 | ||
Financial liabilities: | ||||
Non-maturity deposits, carrying amount | (613,489) | (601,683) | ||
Time deposits, carrying amount | (139,197) | (139,838) | ||
FHLB borrowings, carrying amount | (33,450) | (39,100) | ||
Subordinated debentures, carrying amount | (21,334) | (21,284) | ||
Other borrowings, carrying amount | (13,491) | (12,483) | ||
Accrued interest payable, carrying amount | (253) | $ (268) | ||
Derivative financial instruments | $ (154) |
Fair Value of Financial Instruments and Fair Value Measurements (Details 1) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Assets: | ||
Investment securities available-for-sale, at fair value | $ 396,920 | $ 385,563 |
Loans held for Sale | 8,588 | 5,517 |
Derivative financial instruments | 966 | 662 |
Liabilities: | ||
Derivative financial instruments, carrying amount | (154) | |
Common stocks [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 763 | 1,108 |
Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Loans held for Sale | 8,588 | |
Derivative financial instruments | 966 | 662 |
Liabilities: | ||
Derivative financial instruments, carrying amount | (154) | |
Fair Value, Measurements, Recurring [Member] | Common stocks [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 763 | 1,108 |
Fair Value, Measurements, Recurring [Member] | Agency mortgage-backed securities [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 117,697 | 108,376 |
U. S. federal agency obligations [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 21,423 | 27,139 |
Municipal obligations, tax exempt [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 175,150 | 161,662 |
Municipal obligations, tax exempt [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 175,150 | 161,662 |
Municipal obligations, taxable [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 68,165 | 71,563 |
Municipal obligations, taxable [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 68,165 | 71,563 |
Loans Held for Sale [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 5,517 | |
U. S. treasury securities [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 4,998 | 6,015 |
U. S. treasury securities [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 4,998 | 6,015 |
Certificates of deposit [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 8,724 | 9,700 |
Fair Value, Inputs, Level 1 [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 5,761 | 7,123 |
Loans held for Sale | 0 | 0 |
Derivative financial instruments | 0 | 0 |
Liabilities: | ||
Derivative financial instruments, carrying amount | 0 | |
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Loans held for Sale | 0 | |
Derivative financial instruments | 0 | 0 |
Liabilities: | ||
Derivative financial instruments, carrying amount | 0 | |
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | Common stocks [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 763 | 1,108 |
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | Agency mortgage-backed securities [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | U. S. federal agency obligations [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | Municipal obligations, tax exempt [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | Municipal obligations, taxable [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | Loans Held for Sale [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 0 | |
Fair Value, Inputs, Level 1 [Member] | U. S. treasury securities [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 4,998 | 6,015 |
Fair Value, Inputs, Level 1 [Member] | Certificates of deposit [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 391,159 | 378,440 |
Loans held for Sale | 8,588 | 5,517 |
Derivative financial instruments | 966 | 662 |
Liabilities: | ||
Derivative financial instruments, carrying amount | (154) | |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Loans held for Sale | 8,588 | |
Derivative financial instruments | 966 | 662 |
Liabilities: | ||
Derivative financial instruments, carrying amount | (154) | |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Common stocks [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Agency mortgage-backed securities [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 117,697 | 108,376 |
Fair Value, Inputs, Level 2 [Member] | U. S. federal agency obligations [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 21,423 | 27,139 |
Fair Value, Inputs, Level 2 [Member] | Municipal obligations, tax exempt [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 175,150 | 161,662 |
Fair Value, Inputs, Level 2 [Member] | Municipal obligations, taxable [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 68,165 | 71,563 |
Fair Value, Inputs, Level 2 [Member] | Loans Held for Sale [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 5,517 | |
Fair Value, Inputs, Level 2 [Member] | U. S. treasury securities [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Certificates of deposit [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 8,724 | 9,700 |
Fair Value, Inputs, Level 3 [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Loans held for Sale | 0 | 0 |
Derivative financial instruments | 0 | 0 |
Liabilities: | ||
Derivative financial instruments, carrying amount | 0 | |
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Loans held for Sale | 0 | |
Derivative financial instruments | 0 | 0 |
Liabilities: | ||
Derivative financial instruments, carrying amount | 0 | |
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Common stocks [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Agency mortgage-backed securities [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | U. S. federal agency obligations [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Municipal obligations, tax exempt [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Municipal obligations, taxable [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Loans Held for Sale [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 0 | |
Fair Value, Inputs, Level 3 [Member] | U. S. treasury securities [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Certificates of deposit [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Investment securities available-for-sale, at fair value | $ 0 | $ 0 |
Fair Value of Financial Instruments and Fair Value Measurements (Details 2) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Aggregate fair value | $ 8,588 | $ 5,517 |
Contractual balance | 8,443 | 5,480 |
Gain | $ 145 | $ 37 |
Fair Value of Financial Instruments and Fair Value Measurements (Details 3) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Interest income | $ 45 | $ 105 |
Change in fair value | 109 | 79 |
Total change in fair value | $ 154 | $ 184 |
Fair Value of Financial Instruments and Fair Value Measurements (Details 4) - Fair Value, Measurements, Nonrecurring [Member] - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Commercial [Member] | ||
Assets: | ||
Impaired loans | $ 221 | $ 222 |
Agriculture [Member] | ||
Assets: | ||
Impaired loans | 749 | 645 |
One-to-four family residential real estate [Member] | ||
Assets: | ||
Impaired loans | 329 | 142 |
Commercial real estate [Member] | ||
Assets: | ||
Impaired loans | 180 | 219 |
Fair Value, Inputs, Level 1 [Member] | Commercial [Member] | ||
Assets: | ||
Impaired loans | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | Agriculture [Member] | ||
Assets: | ||
Impaired loans | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | One-to-four family residential real estate [Member] | ||
Assets: | ||
Impaired loans | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | Commercial real estate [Member] | ||
Assets: | ||
Impaired loans | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Commercial [Member] | ||
Assets: | ||
Impaired loans | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Agriculture [Member] | ||
Assets: | ||
Impaired loans | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | One-to-four family residential real estate [Member] | ||
Assets: | ||
Impaired loans | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Commercial real estate [Member] | ||
Assets: | ||
Impaired loans | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Commercial [Member] | ||
Assets: | ||
Impaired loans | 221 | 222 |
Fair Value, Inputs, Level 3 [Member] | Agriculture [Member] | ||
Assets: | ||
Impaired loans | 749 | 645 |
Fair Value, Inputs, Level 3 [Member] | One-to-four family residential real estate [Member] | ||
Assets: | ||
Impaired loans | 329 | 142 |
Fair Value, Inputs, Level 3 [Member] | Commercial real estate [Member] | ||
Assets: | ||
Impaired loans | $ 180 | $ 219 |
Fair Value of Financial Instruments and Fair Value Measurements (Details 5) - Fair Value, Measurements, Nonrecurring [Member] - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
|
One-to-four family residential real estate [Member] | ||
Impaired Loans Fair Value Disclosure | $ 142 | |
Real Estate Owned Fair Value Disclosure | $ 329 | |
Fair Value Measurements, Valuation Techniques | Sales comparison | Sales comparison |
Fair Value Measurements, Changes in Valuation Techniques | Adjustment to appraised value | Adjustment to appraised value |
Fair Value Measurements Sales Comparison Range | 10.00% | 10.00% |
Commercial [Member] | ||
Impaired Loans Fair Value Disclosure | $ 221 | |
Fair Value Measurements, Valuation Techniques | Sales comparison | |
Fair Value Measurements, Changes in Valuation Techniques | Adjustment to appraised value | |
Agriculture [Member] | ||
Impaired Loans Fair Value Disclosure | $ 749 | $ 645 |
Fair Value Measurements, Valuation Techniques | Sales comparison | Sales comparison |
Fair Value Measurements, Changes in Valuation Techniques | Adjustment to appraised value | Adjustment to comparable sales |
Agriculture [Member] | Minimum [Member] | ||
Fair Value Measurements Sales Comparison Range | 8.00% | 8.00% |
Agriculture [Member] | Maximum [Member] | ||
Fair Value Measurements Sales Comparison Range | 80.00% | 80.00% |
Consumer loans [Member] | ||
Impaired Loans Fair Value Disclosure | $ 222 | |
Fair Value Measurements, Valuation Techniques | Sales comparison | |
Fair Value Measurements, Changes in Valuation Techniques | Adjustment to comparable sales | |
Consumer loans [Member] | Minimum [Member] | ||
Fair Value Measurements Sales Comparison Range | 0.00% | 7.00% |
Consumer loans [Member] | Maximum [Member] | ||
Fair Value Measurements Sales Comparison Range | 80.00% | 80.00% |
Commercial real estate [Member] | ||
Impaired Loans Fair Value Disclosure | $ 180 | $ 219 |
Fair Value Measurements, Valuation Techniques | Sales comparison | Sales comparison |
Fair Value Measurements, Changes in Valuation Techniques | Adjustment to appraised value | Adjustment to appraised value |
Commercial real estate [Member] | Minimum [Member] | ||
Fair Value Measurements Sales Comparison Range | 0.00% | 2.00% |
Commercial real estate [Member] | Maximum [Member] | ||
Fair Value Measurements Sales Comparison Range | 60.00% | 15.00% |
Fair Value of Financial Instruments and Fair Value Measurements (Details Textual) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Fair Value of Financial Instruments And Fair Value Measurements [Line Items] | ||
Impaired Financing Receivable, Related Allowance | $ 308 | $ 274 |
Impaired Financing Receivable, Recorded Investment, Total | $ 6,516 | $ 6,728 |
Regulatory Capital Requirements (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
|||
---|---|---|---|---|---|
Regulatory Capital Requirements [Line Items] | |||||
Leverage - For capital adequacy purposes Ratio | 4.00% | ||||
Common Equity Tier 1 Capital - For capital adequacy purposes Ratio | 4.50% | ||||
Tier 1 Capital - For capital adequacy purposes Ratio | 6.00% | ||||
Total Risk Based Capital - For capital adequacy purposes Ratio | 8.00% | ||||
Companys Regulatory Capital Requirements [Member] | |||||
Regulatory Capital Requirements [Line Items] | |||||
Leverage - Actual Amount | $ 90,260 | $ 88,819 | |||
Common Equity Tier 1 Capital - Actual Amount | 69,609 | 68,263 | |||
Tier 1 Capital - Actual Amount | 90,260 | 88,819 | |||
Total Risk Based Capital - Actual Amount | $ 95,901 | $ 94,596 | |||
Leverage - Actual Ratio | 10.05% | 10.04% | |||
Common Equity Tier 1 Capital - Actual Ratio | 13.49% | 13.32% | |||
Tier 1 Capital - Actual Ratio | 17.49% | 17.33% | |||
Total Risk Based Capital - Actual Ratio | 18.58% | 18.46% | |||
Leverage - For capital adequacy purposes Amount | $ 35,914 | $ 35,370 | |||
Common Equity Tier 1 Capital - For capital adequacy purposes Amount | 29,672 | 26,265 | |||
Tier 1 Capital - For capital adequacy purposes Amount | 37,413 | 33,952 | |||
Total Risk Based Capital - For capital adequacy purposes Amount | $ 47,733 | $ 44,201 | |||
Leverage - For capital adequacy purposes Ratio | [1] | 4.00% | 4.00% | ||
Common Equity Tier 1 Capital - For capital adequacy purposes Ratio | [1] | 5.80% | 5.10% | ||
Tier 1 Capital - For capital adequacy purposes Ratio | [1] | 7.30% | 6.60% | ||
Total Risk Based Capital - For capital adequacy purposes Ratio | [1] | 9.30% | 8.60% | ||
|
Regulatory Capital Requirements (Details 1) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
|||
---|---|---|---|---|---|
Regulatory Capital Requirements [Line Items] | |||||
Leverage - For capital adequacy purposes Ratio | 4.00% | ||||
Common Equity Tier 1 Capital - For capital adequacy purposes Ratio | 4.50% | ||||
Tier 1 Capital - For capital adequacy purposes Ratio | 6.00% | ||||
Total Risk Based Capital - For capital adequacy purposes Ratio | 8.00% | ||||
Banks Regulatory Capital Requirements [Member] | |||||
Regulatory Capital Requirements [Line Items] | |||||
Leverage - Actual Amount | $ 89,262 | $ 88,076 | |||
Common Equity Tier 1 Capital - Actual Amount | 89,262 | 88,076 | |||
Tier 1 Capital - Actual Amount | 89,262 | 88,076 | |||
Total Risk Based Capital - Actual Amount | $ 94,729 | $ 93,560 | |||
Leverage - Actual Ratio | 9.97% | 9.98% | |||
Common Equity Tier 1 Capital - Actual Ratio | 17.35% | 17.23% | |||
Tier 1 Capital - Actual Ratio | 17.35% | 17.23% | |||
Total Risk Based Capital - Actual Ratio | 18.41% | 18.31% | |||
Leverage - For capital adequacy purposes Amount | $ 35,813 | $ 35,284 | |||
Common Equity Tier 1 Capital - For capital adequacy purposes Amount | 29,583 | 26,194 | |||
Tier 1 Capital - For capital adequacy purposes Amount | 37,301 | 33,861 | |||
Total Risk Based Capital - For capital adequacy purposes Amount | $ 47,591 | $ 44,083 | |||
Leverage - For capital adequacy purposes Ratio | [1] | 4.00% | 4.00% | ||
Common Equity Tier 1 Capital - For capital adequacy purposes Ratio | [1] | 5.80% | 5.10% | ||
Tier 1 Capital - For capital adequacy purposes Ratio | [1] | 7.30% | 6.60% | ||
Total Risk Based Capital - For capital adequacy purposes Ratio | [1] | 9.30% | 8.60% | ||
Leverage - To be well-capitalized under prompt corrective action provisions Amount | $ 44,766 | $ 44,105 | |||
Common Equity Tier 1 Capital - To be well-capitalized under prompt corrective action provisions Amount | 33,442 | 33,222 | |||
Tier 1 Capital - To be well-capitalized under prompt corrective action provisions Amount | 41,159 | 40,888 | |||
Total Risk Based Capital - To be well-capitalized under prompt corrective action provisions Amount | $ 51,449 | $ 51,110 | |||
Leverage - To be well-capitalized under prompt corrective action provisions Ratio | 5.00% | 5.00% | |||
Common Equity Tier 1 Capital - To be well-capitalized under prompt corrective action provisions Ratio | 6.50% | 6.50% | |||
Tier 1 Capital - To be well-capitalized under prompt corrective action provisions Ratio | 8.00% | 8.00% | |||
Total Risk Based Capital - To be well-capitalized under prompt corrective action provisions Ratio | 10.00% | 10.00% | |||
|
Regulatory Capital Requirements (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | 36 Months Ended | |||
---|---|---|---|---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
Jan. 01, 2019 |
||||
Regulatory Capital Requirements [Line Items] | ||||||
Tier One Leverage Capital Required for Capital Adequacy to Average Assets | 4.00% | |||||
Capital Required for Capital Adequacy to Risk Weighted Assets | 8.00% | |||||
Common Equity Tier One Risk Based Capital Required For Capital Adequacy To Risk Weighted Assets | 4.50% | |||||
Assets, Total | $ 923,017 | $ 911,382 | ||||
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets | 6.00% | |||||
Companys Regulatory Capital Requirements [Member] | ||||||
Regulatory Capital Requirements [Line Items] | ||||||
Tier One Leverage Capital Required for Capital Adequacy to Average Assets | [1] | 4.00% | 4.00% | |||
Capital Required for Capital Adequacy to Risk Weighted Assets | [1] | 9.30% | 8.60% | |||
Common Equity Tier One Risk Based Capital Required For Capital Adequacy To Risk Weighted Assets | [1] | 5.80% | 5.10% | |||
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets | [1] | 7.30% | 6.60% | |||
Tier One Capital Conversation Buffer | 1.25% | 0.625% | ||||
Banks Regulatory Capital Requirements [Member] | ||||||
Regulatory Capital Requirements [Line Items] | ||||||
Tier One Leverage Capital Required for Capital Adequacy to Average Assets | [1] | 4.00% | 4.00% | |||
Capital Required for Capital Adequacy to Risk Weighted Assets | [1] | 9.30% | 8.60% | |||
Common Equity Tier One Risk Based Capital Required For Capital Adequacy To Risk Weighted Assets | [1] | 5.80% | 5.10% | |||
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets | [1] | 7.30% | 6.60% | |||
Tier One Capital Conversation Buffer | 1.25% | 0.625% | ||||
Small Bank Holding Companies [Member] | ||||||
Regulatory Capital Requirements [Line Items] | ||||||
Assets, Total | $ 1,000,000 | |||||
Capital Conservation Buffer [Member] | ||||||
Regulatory Capital Requirements [Line Items] | ||||||
Tier One Capital Conversation Buffer | 1.25% | 0.625% | ||||
Tier One Capital Conversation Buffer Increase | 0.00% | |||||
Capital Conservation Buffer [Member] | Scenario, Forecast [Member] | ||||||
Regulatory Capital Requirements [Line Items] | ||||||
Tier One Capital Conversation Buffer | 2.50% | |||||
|
Impact of Recent Accounting Pronouncements (Details Textual) - USD ($) |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
|
Accounting Standards Update 2016-09 [Member] | |||
Employee Service Share-based Compensation, Tax Benefit Realized from Exercise of Stock Options | $ 12,000 | $ 116,000 | $ 308,000 |
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