10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

☒

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal ended December 31, 2014.

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: 000-55055

SUNNYSIDE BANCORP, INC.

(Exact name of registrant as specified in its charter)

Maryland	46-3001280
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
56 Main Street, Irvington, New York	10533
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (914) 591-8000

Securities registered pursuant to Section 12(b) of the Act: None

(Title of each class to be registered) (Name of each exchange on which
each class is to be registered)

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.01 per share

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes ☐ No ☒

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes ☐ No ☒

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 ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).    Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   ☒

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of  “large accelerated filer,” “accelerated filer” and “smaller reporting 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   ☒​

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes ☐ No ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant was $6,674,103 at June 30, 2014.

As of March 25, 2015, there were 793,500 issued and outstanding shares of the Registrant’s Common Stock.

DOCUMENTS INCORPORATED BY REFERENCE:

Certain information required by Items 10, 11, 12, 13 and 14 is incorporated by reference into Part III hereof from portions of the Proxy Statement for the registrant’s 2015 Annual Meeting of Shareholders.

TABLE OF CONTENTS

Item 1. Business	1
Item 1A. Risk Factors	28
Item 1B. Unresolved Staff Comments	28
Item 2. Properties	28
Item 3. Legal Proceedings	28
Item 4. Mine Safety Disclosures.	28
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer    Purchases of Equity Securities	29
Item 6. Selected Financial Data	30
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of    Operations	30
Item 7A. Quantitative and Qualitative Disclosures about Market Risk	39
Item 8. Financial Statements and Supplementary Data	39
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial    Disclosure	40
Item 9A. Controls and Procedures	40
Item 9B. Other Information	40
Item 10. Directors, Executive Officers and Corporate Governance	41
Item 11. Executive Compensation	41
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related    Stockholder Matters	41
Item 13. Certain Relationships and Related Transactions, and Director Independence	41
Item 14. Principal Accounting Fees and Services	41
Item 15. Exhibits and Financial Statement Schedules	42

i

PART I

ITEM 1.

Business

This annual report contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect,” “will,” “may” and words of similar meaning. These forward-looking statements include, but are not limited to:

•

statements of our goals, intentions and expectations;

•

statements regarding our business plans, prospects, growth and operating strategies;

•

statements regarding the asset quality of our loan and investment portfolios; and

•

estimates of our risks and future costs and benefits.

These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. We are under no duty to and do not take any obligation to update any forward-looking statements after the date of this annual report.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

•

general economic conditions, either nationally or in our market areas, that are worse than expected;

•

competition among depository and other financial institutions;

•

inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments;

•

adverse changes in the securities markets;

•

changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements;

•

our ability to enter new markets successfully and capitalize on growth opportunities;

•

our ability to successfully integrate de novo or acquired branches, if any;

•

our ability to execute on our business strategy to increase commercial real estate and multi-family lending and commercial lending, including implementing a Small Business Administration (“SBA”) lending program;

•

changes in consumer spending, borrowing and savings habits;

•

changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission and the Public Company Accounting Oversight Board;

•

changes in our organization, compensation and benefit plans; and

•

changes in the financial condition, results of operations or future prospects of issuers of securities that we own.

Because of these and a wide variety of other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.

General

Sunnyside Bancorp, Inc.

Sunnyside Bancorp, Inc. (“Sunnyside Bancorp” or the “Company”) was incorporated in the State of Maryland in March 2013 for the purpose of becoming the savings and loan holding company for Sunnyside Federal Savings and Loan Association of Irvington (“Sunnyside Federal” or the “Bank”), upon

1

consummation of the Bank’s mutual to stock conversion. The conversion was consummated in July 2013 at which time Sunnyside Bancorp became the registered savings and loan holding company of the Bank. To date, other than holding all of the issued and outstanding stock of Sunnyside Federal and making a loan to the Bank’s employee stock ownership plan, we have not engaged in any business.

At December 31, 2014, Sunnyside Bancorp had consolidated assets of  $93.2 million, liabilities of  $81.0 million and equity of  $12.2 million.

Sunnyside Bancorp is a registered savings and loan holding company and is subject to comprehensive regulation and examination by the Board of Governors of the Federal Reserve System. Sunnyside Bancorp’s executive and administrative office is located at 56 Main Street, Irvington, New York 10533, and our telephone number at this address is (914) 591-8000. Our website address is www.sunnysidefederal.com. Information on this website should not be considered a part of this annual report.

Sunnyside Federal Savings and Loan Association of Irvington

Sunnyside Federal is a federal savings association that was founded in 1930. In July 2013, we completed our mutual to stock conversion thereby becoming a stock savings bank and becoming the wholly owned subsidiary of Sunnyside Bancorp. Sunnyside Federal conducts business from its full-service banking office located in Irvington, New York which is located in Westchester County, New York approximately 25 miles north of New York City. We consider our deposit market area to be the Westchester County, New York towns of Irvington, Tarrytown, Sleepy Hollow, Hastings, Dobbs Ferry and Ardley-on-Hudson, and consider our lending area to be primarily Westchester, Putnam and Rockland Counties, New York.

Our business consists primarily of taking deposits from the general public and investing those deposits, together with funds generated from operations, in one- to four-family residential real estate loans and commercial and multi-family real estate loans, and, to a much more limited extent, commercial loans, home equity lines of credit and other loans (consisting primarily of loans secured by deposits and marketable securities). At December 31, 2014, $31.5 million, or 72.3%, of our total loan portfolio was comprised of owner-occupied, one- to four-family residential real estate loans and 21.6% of our total loan portfolio was comprised of commercial real estate and multi-family mortgage loans.

We also invest in securities, which consist primarily of U.S. government agency obligations and mortgage-backed securities and to a lesser extent, securities of states, counties and political subdivisions.

We offer a variety of deposit accounts, including certificate of deposit accounts, money market accounts, savings accounts, NOW accounts and individual retirement accounts. We historically have not used borrowings to fund our operations and had no borrowings at December 31, 2014.

For the year ended December 31, 2014, we had a net loss of  $210,000, compared to a net loss of $60,000 for the year ended December 31, 2013. Our current business strategy includes increasing our asset size, diversifying our loan portfolio to increase our non-residential lending, including commercial and multi-family real estate lending and commercial lending and increasing our non-interest income, as ways to improve our profitability in future periods.

The majority of our current executive management team has been with Sunnyside Federal since 2010. Since that time, we have begun to shift Sunnyside Federal’s strategy to diversify our traditional thrift focus into a more commercial bank style of operation with a broadened base of financial products and services while emphasizing superior customer service. While residential real estate lending has been, and will remain, the most important part of our operations, we intend to diversify our focus on non-residential lending, including commercial and multi-family real estate lending and commercial lending, including SBA lending.

Sunnyside Federal is subject to comprehensive regulation and examination by the Office of the Comptroller of the Currency. Our executive and administrative office is located at 56 Main Street, Irvington, New York 10533, and our telephone number at this address is (914) 591-8000. Our website address is www.sunnysidefederal.com. Information on this website should not be considered a part of this annual report.

2

Market Area and Competition

We conduct our operations from our full-service banking office located in Irvington, Westchester County, New York, which is located approximately 25 miles north of New York City. Our primary deposit market area includes Irvington and the contiguous towns of Tarrytown, Sleepy Hollow, Hastings, Dobbs Ferry and Ardley-on-Hudson, all of which are located in Westchester County, New York. Our primary lending market area includes Westchester, Putnam and Rockland counties, New York. We will, on occasion, make loans secured by properties located outside of our primary lending market, especially to borrowers with whom we have an existing relationship and who have a presence within our primary lending area.

At December 31, 2014, $31.5 million, or 72.3%, of our total loan portfolio was comprised of owner-occupied, one-to four family residential real estate loans. Accordingly, a downturn in the residential real estate market in Westchester, Putnam, or Rockland Counties could significantly affect Sunnyside Federal’s net income.

Westchester County is primarily a suburban community and is the second wealthiest county in the State of New York. Some key statistics, according to the US Census Bureau, on Westchester County for the period of 2009 through 2013 are provided below:

•

The homeownership rate in Westchester County was 61.9%, compared to 54.2% in the State of New York;

•

The median home value was $518,400, compared to $288,200 in the State of New York;

•

The median household income in Westchester County was $81,946, compared to $58,003 in the State of New York;

•

Approximately 45.4% of the population of Westchester County held a bachelor’s degree or higher, compared to 33.2% in the State of New York; and

•

Approximately 9.5% of the population of Westchester County had incomes below poverty level, compared to 15.3% in the State of New York.

Sunnyside Federal also makes loans on a regular basis to residents of Putnam and Rockland Counties, New York. Below are some key statistics, according to the US Census Bureau, on the economic outlook of Putnam and Rockland Counties for the period of 2009 through 2013:

•

The homeownership rate in Putnam County and Rockland County was 83.1% and 69.9%, respectively, compared to 54.2% in the State of New York;

•

The median home value in Putnam County and Rockland County was $372,200 and $435,300, respectively, compared to $288,200 in the State of New York;

•

The median household income in Putnam County and Rockland County was $95,117 and $84,951, respectively, compared to $58,003 in the State of New York;

•

Approximately 38.4% and 40.4% of the population of Putnam County and Rockland County, respectively, held a bachelor’s degree or higher, compared to 33.2% in the State of New York; and

•

Approximately 5.8% and 13.6% of the population of Putnam County and Rockland County, respectively, had incomes below poverty level, compared to 15.3% in the State of New York.

We face significant competition within our market both in making loans and attracting deposits. Our market area has a high concentration of financial institutions including large money center and regional banks, community banks and credit unions. Some of our competitors offer products and services that we currently do not offer, such as trust services and private banking. Our competition for loans and deposits comes principally from commercial banks, savings institutions, mortgage banking firms, consumer finance companies and credit unions. We face additional competition for deposits from short-term money market funds, brokerage firms, mutual funds and insurance companies. Our primary focus is to build and develop profitable customer relationships across all lines of business while maintaining our position as a community bank.

3

We are a small community savings institution and as of June 30, 2014 (the latest date for which information is available), our market share was 0.13% of total FDIC-insured deposits in Westchester, making us the 31th largest out of 38financial institutions in Westchester County based upon deposit share as of that date.

Business Strategy

Our current business strategy is to operate as a community bank dedicated to serving the needs of our consumer and business customers and emphasizing personalized and efficient customer service. Highlights of our current business strategy include:

•

growing our assets and liabilities by increasing our presence in the communities we serve and expanding our service delivery channels;

•

utilizing our management’s commercial banking experience by diversifying our lending operations to increase our emphasis on commercial and multi-family real estate lending and commercial lending, and implementing an SBA lending program;

•

maintaining our strong asset quality profile through conservative loan underwriting;

•

increasing our non-interest income through the origination and sale of one-to four-family residential real estate loans and the guaranteed-portion of SBA loans;

•

managing interest rate risk by emphasizing the origination of shorter-term loans for retention in our portfolio and considering the sale of certain newly originated longer-term one- to four-family residential real estate loans;

•

continuing to attract and retain customers in our market area and build our “core” deposits consisting of demand, NOW, savings and money market accounts; and

•

expanding our banking franchise as opportunities arise through de novo branching or a branch acquisition although we do not currently have any understandings or agreements to establish or acquire any new branch offices.

Lending Activities

General.   Historically, our principal lending activity has been the origination, for retention in our portfolio, of mortgage loans collateralized by one- to four-family residential real estate located within our primary market area, and at December 31, 2014, $31.5 million, or 72.3%, of our total loan portfolio was comprised of owner-occupied one- to four-family residential real estate loans. To a lesser extent, we also offer commercial and multi-family real estate loans, which we retain in our portfolio, including non-owner occupied one- to four-family residential real estate loans. At December 31, 2014, $9.4 million, or 21.6% of our total loan portfolio was comprised of commercial and multi-family real estate loans. We intend to grow our commercial and multi-family real estate loan portfolio, subject to favorable market conditions, including the origination of SBA loans. We have, on occasion, purchased loans, including commercial real estate and one- to four-family residential real estate loans, and at December 31, 2014, purchased loans accounted for $3.8 million of our total loan portfolio. We will opportunistically seek to purchase whole or participations in one- to four-family residential real estate loans and commercial and multi-family real estate loans in the future.

4

Loan Portfolio Composition.   The following table sets forth the composition of our loan portfolio, by type of loan at the dates indicated, excluding loans held for sale.

​	At December 31,
​	2014					2013
​	Amount			Percent		Amount			Percent
​	(Dollars in thousands)
Real estate loans:	​			​		​			​
One- to four-family residential	​	$	31,457	​	72.3%	​	$	33,526	​	83.2%
Commercial and multi-family residential	​	​	9,428	​	21.6	​	​	5,548	​	13.8
Home equity lines of credit	​	​	370	​	.8	​	​	690	​	1.7
Other loans	​	​	2,315	​	5.3	​	​	544	​	1.3
Total loans receivable	​	​	43,570	​	100.0%	​	​	40,308	​	100.0%
Less:	​			​		​			​
Deferred loan (costs) fees	​	​	(46)	​	​	​	​	(72)	​
Allowance for loan losses	​	​	396	​	​	​	​	340	​
Total loans receivable, net	​	$	43,220	​	​	​	$	40,040	​

Loan Portfolio Maturities.   The following table summarizes the scheduled repayments of our loan portfolio at December 31, 2014. Demand loans, loans having no stated repayment schedule or maturity, and overdraft loans are reported as being due in the year ending December 31, 2015. Maturities are based on the final contractual payment date and do not reflect the impact of prepayments and scheduled principal amortization.

​

One- to four- family residential real estate loans

Commercial and multi- family residential real estate loans

Home equity lines of credit

Other loans

Total

​

(In thousands)

Due During the Years Ending December 31,

​

​

​

​

​

2015

​

$

—

​

$

782

​

$

—

​

$

1

​

$

783

2016

​

​

10

​

​

1,700

​

​

—

​

​

1,505

​

​

3,215

2017

​

​

51

​

​

—

​

​

—

​

​

4

​

​

55

2018 to 2019

​

​

160

​

​

211

​

​

—

​

​

678

​

​

1,049

2020 to 2024

​

​

1,299

​

​

4,803

​

​

253

​

​

—

​

​

6,355

2025 to 2029

​

​

7,250

​

​

1,932

​

​

117

​

​

—

​

​

9,299

2030 and beyond

​

​

22,687

​

​

—

​

​

—

​

​

127

​

​

22,814

Total

​

$

31,457

​

$

9,428

​

$

370

​

$

2,315

​

$

43,570

5

Fixed and Adjustable-Rate Loan Schedule.   The following table sets forth at December 31, 2014, the dollar amount of all fixed-rate and adjustable-rate loans due after December 31, 2015.

​	Due after December 31, 2015
​	Fixed			Adjustable			Total
​	(In thousands)
Real estate loans:	​			​			​
One- to four-family residential	​	$	23,409	​	$	8,048	​	$	31,457
Commercial and multi-family residential	​	​	6,177	​	​	2,469	​	​	8,646
Home equity lines of credit	​	​	—	​	​	370	​	​	370
Other loans	​	​	655	​	​	1,659	​	​	2,314
Total loans	​	$	30,241	​	$	12,546	​	$	42,787

One- to Four-Family Residential Real Estate Lending.   The focus of our lending program has historically been the origination and retention in our portfolio of one- to four-family residential real estate loans. At December 31, 2014, $31.5 million, or 72.3% of our total loan portfolio, consisted of owner-occupied, one- to four-family residential real estate loans. We do not currently sell any of these loans but, consistent with our business strategy to increase non-interest income and manage interest rate risk, we will consider selling certain newly originated, longer-term (15 years or greater) fixed-rate loans.

We originate both fixed-rate and adjustable-rate one- to four-family residential real estate loans. At December 31, 2014, 74.4% of our one- to four-family residential real estate loans were fixed-rate loans, and 25.6% were adjustable-rate loans.

Because we have not historically sold any of the one- to four-family residential real estate loans that we have originated, we have not originated these loans in conformance with either Fannie Mae or Freddie Mac underwriting guidelines. We intend to consider selling certain newly originated, longer-term (15 years or greater), one- to four-family residential real estate loans, in an effort to generate fee income and manage interest rate risk. It is expected that these loans will be underwritten according to Freddie Mac guidelines, and we will refer to loans that conform to such guidelines as “conforming loans.” We expect to originate both fixed- and adjustable-rate mortgage loans conforming to Fannie Mae guidelines in amounts up to the maximum conforming loan limits as established by the Federal Housing Finance Agency for Freddie Mac, which as of December 31, 2014 was generally $417,000 for single-family homes in our market area. We may also originate loans above the lending limit for conforming loans, which we will refer to as “jumbo loans.”

Virtually all of our one- to four-family residential real estate loans are secured by properties located in our primary lending area, which we define as the New York Counties of Westchester, Putnam and Rockland.

We generally limit the loan-to-value ratios of our mortgage loans to 80% of the sales price or appraised value, whichever is lower.

Our fixed-rate one- to four-family residential real estate loans typically have terms of 15 or 30 years.

Our adjustable-rate one- to four-family residential real estate loans generally have fixed rates for initial terms of three, five or seven years, and adjust annually thereafter at a margin, which in recent years has been 2.50% over the weekly average yield on U.S. treasury securities adjusted to a constant maturity of one year. The maximum amount by which the interest rate may be increased or decreased is generally 2% per adjustment period and the lifetime interest rate cap is generally 6% over the initial interest rate of the loan. Our adjustable-rate loans carry terms to maturity of up to 30 years. Certain of our adjustable-rate loans which were originated prior to 2010 can be adjusted upward but cannot be adjusted below the initial interest rate of the loan.

Although adjustable-rate mortgage loans may reduce to an extent our vulnerability to changes in market interest rates because they periodically reprice, as interest rates increase the required payments due from the borrower also increase (subject to rate caps), increasing the potential for default by the borrower. At the same time, the ability of the borrower to repay the loan and the marketability of the underlying

6

collateral may be adversely affected by higher interest rates. Upward adjustments of the contractual interest rate are also limited by the maximum periodic and lifetime rate adjustments permitted by our loan documents. As a result, the effectiveness of adjustable-rate mortgage loans in compensating for changes in general interest rates may be limited during periods of rapidly rising interest rates.

We do not offer “interest only” mortgage loans on permanent one- to four-family residential real estate loans (where the borrower pays interest for an initial period, after which the loan converts to a fully amortizing loan). We also do not offer loans that provide for negative amortization of principal, such as “Option ARM” loans, where the borrower can pay less than the interest owed on the loan, resulting in an increased principal balance during the life of the loan. We do not offer “subprime loans” on one-to four- family residential real estate loans (i.e., loans that generally target borrowers with weakened credit histories typically characterized by payment delinquencies, previous charge-offs, judgments, bankruptcies, or borrowers with questionable repayment capacity as evidenced by low credit scores or high debt-burden ratios), or “Alt-A” (i.e., loans that generally target borrowers with better credit scores who borrow with alternative documentation such as little or no verification of income).

Commercial and Multi-Family Real Estate Lending.   Consistent with our strategy to expand our loan products and to enhance the yield and reduce the term to maturity of our loan portfolio, we offer commercial and multi-family real estate loans. At December 31, 2014, we had $9.4 million in commercial and multi-family real estate loans, representing 21.6% of our total loan portfolio.Subject to future economic, market and regulatory conditions, we will continue to increase our originations and purchases of commercial and multi-family real estate loans.

Generally, our commercial real estate and multi-family loans have terms of up to 10 years and amortize for a period of up to 25 years. Interest rates may be fixed or adjustable, and if adjustable then they are generally based on the Prime rate of interest.

Almost all of our commercial and multi-family real estate loans are collateralized by office buildings, mixed-use properties and multi-family real estate located in our market area.

We consider a number of factors in originating commercial and multi-family real estate loans, including non-owner occupied, one- to four-family residential real estate loans. We evaluate the qualifications and financial condition of the borrower, including credit history, profitability and expertise, as well as the value and condition of the property securing the loan. When evaluating the qualifications of the borrower, we consider the financial resources of the borrower, the borrower’s experience in owning or managing similar property and the borrower’s payment history with us and other financial institutions. In evaluating the property securing the loan, the factors we consider include the net operating income of the mortgaged property before debt service and depreciation, the ratio of the loan amount to the appraised value of the mortgaged property and the debt service coverage ratio (the ratio of net operating income to debt service). All commercial and multi-family real estate loans are appraised by outside independent appraisers who are approved by the board of directors on an annual basis. Personal guarantees are generally obtained from the principals of commercial and multi-family real estate loans.

Commercial and multi-family real estate loans, including non-owner occupied, one- to four-family residential real estate loans, entail greater credit risks compared to owner-occupied one- to four-family residential real estate loans because they typically involve larger loan balances concentrated with single borrowers or groups of related borrowers. In addition, the payment of loans secured by income-producing properties typically depends on the successful operation of the property, as repayment of the loan generally is dependent, in large part, on sufficient income from the property to cover operating expenses and debt service. Changes in economic conditions that are not in the control of the borrower or lender could affect the value of the collateral for the loan or the future cash flow of the property. Additionally, any decline in real estate values may be more pronounced for commercial and multi-family real estate than residential properties.

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Our loans-to-one borrower limit is 15% of Sunnyside Federal’s unimpaired capital, which limit was $1.9 million at December 31, 2014. We generally target commercial and multi-family real estate loans with balances of up to the lesser of  $1.5 million or our legal lending limit. At December 31, 2014, our average commercial real estate loan had a balance of  $545,000. At that same date, our largest commercial real estate relationship totaled $1.7 million and was performing in accordance with its repayment terms.

Home Equity Lines of Credit.   We offer home equity lines of credit secured by a first or second mortgage on residential property. Home equity lines of credit are made with adjustable rates, and with combined loan-to-value ratios of up to 80% on an owner-occupied principal residence.

Home equity lines of credit are generally underwritten using the same criteria that we use to underwrite one- to four-family residential real estate loans. Home equity lines of credit may be underwritten with a loan-to-value ratio of up to 80% when combined with the principal balance of the existing first mortgage loan. Generally, our home equity lines of credit are originated with adjustable-rates based on the floating prime rate of interest and require interest paid monthly during the first five years and principal and interest for an additional 10 years. Home equity lines of credit are available in amounts of up to $250,000.

Home equity lines of credit have greater risk than one- to four-family residential real estate loans secured by first mortgages. We face the risk that the collateral will be insufficient to compensate us for loan losses and costs of foreclosure. When customers default on their loans, we attempt to foreclose on the property and resell the property as soon as possible to minimize foreclosure and carrying costs. However, the value of the collateral may not be sufficient to compensate us for the amount of the unpaid loan and we may be unsuccessful in recovering the remaining balance from those customers. Decreases in real estate values could adversely affect the value of property used as collateral for our loans.

At December 31, 2014, the average loan balance of our outstanding home equity lines of credit was $123,000, and the largest outstanding balance of any such loan was $225,000. This loan was performing in accordance with its repayment terms at December 31, 2014.

Other Loans.   To a much lesser extent, we offer a variety of other loans to individuals who reside or work in our market area, the majority of which are secured by passbook savings accounts and other collateral, including marketable securities. At December 31, 2014, other loans totaled $2.3 million, or 5.3% of our loan portfolio.

Other loans generally have shorter terms to maturity, which reduces our exposure to changes in interest rates. In addition, management believes that offering other loan products helps to expand and create stronger ties to our existing customer base by increasing the number of customer relationships and providing cross-marketing opportunities.

Other loans generally have greater risk compared to longer-term loans secured by one- to four-family residential real estate loans.

Loan Originations, Participations, Purchases and Sales.   Our loan originations are generated by our loan personnel operating at our banking office. All loans we originate are underwritten pursuant to our policies and procedures. While we originate both fixed-rate and adjustable-rate loans, our ability to generate each type of loan depends upon relative borrower demand and the pricing levels as set in the local marketplace by competing banks, thrifts, credit unions, and mortgage banking companies. Our volume of real estate loan originations is influenced significantly by market interest rates, and, accordingly, the volume of our real estate loan originations can vary from period to period.

We have historically retained all of our loans in portfolio, but it is our intention, subject to favorable market conditions, to consider selling certain newly originated, longer-term (15 years or greater), fixed-rate one-to-four family residential real estate loans.

We have, on occasion, purchased loans, including commercial real estate and one- to four-family residential real estate loans, and at December 31, 2014, purchased loans accounted for $3.8 million of our total loan portfolio. We will opportunistically seek to purchase whole or participations in one to four-family residential real estate loans and commercial and multi-family real estate loans in the future.

8

The following table shows our loan origination, purchases and repayment activities for the years indicated.

​	Year Ended December 31,
​	2014			2013
​	(In thousands)
Total loans at beginning of year	​	$	40,308	​	$	40,150
Loans originated:	​			​
Real estate loans:	​			​
One- to four-family residential	​	​	3,533	​	​	5,634
Commercial and multi-family	​	​	5,680	​	​	720
Home equity lines of credit	​	​	—	​	​	9
Total real estate loans	​	​	9,213	​	​	6,363
Other	​	​	1,688	​	​	8
Total loans originated	​	$	10,901	​	$	6,371
Loans Purchased:	​			​
One- to four-family residential	​	​	—	​	​	2,214
Deduct:	​			​
Principal repayments	​	​	7,639	​	​	8,427
Net loan activity	​	​	3,262	​	​	158
Total loans at end of year	​	$	43,570	​	$	40,308

Loan Approval Procedures and Authority.   Pursuant to applicable law, the aggregate amount of loans that we are permitted to make to any one borrower or a group of related borrowers is generally limited to 15% of Sunnyside Federal’s unimpaired capital and surplus (25% if the amount in excess of 15% is secured by “readily marketable collateral” or 30% for certain residential development loans). At December 31, 2014, our largest credit relationship totaled $3.2 million of which $1.5 million was cash secured and $1.7 million was secured by commercial real estate. At December 31, 2014, this relationship was performing in accordance with its terms. Our second largest relationship at this date was a $993,000 loan secured by commercial real estate that was performing in accordance with its terms.

Our lending is subject to written underwriting standards and origination procedures. Decisions on loan applications are made on the basis of detailed applications submitted by the prospective borrower and property valuations (consistent with our appraisal policy) prepared by outside independent licensed appraisers approved by our board of directors as well as internal evaluations, where permitted by regulations. The loan applications are designed primarily to determine the borrower’s ability to repay the requested loan, and the more significant items on the application are verified through use of credit reports, financial statements and tax returns.

All commercial and multi-family real estate loans require approval from our board of directors. Our credit committee which is comprised of our President and Chief Executive Officer, our Chief Financial Officer and one outside director, has approval authority of up to $500,000 for one- to four-family residential real estate loans and up to $250,000 for home equity lines of credit.

Generally, we require title insurance on our mortgage loans as well as fire and extended coverage casualty insurance in amounts at least equal to the principal amount of the loan or the value of improvements on the property, depending on the type of loan. We also require flood insurance if the improved property is determined to be in a flood zone area.

Collection Procedures.   When a residential mortgage borrower fails to make required payments on a loan, we take a number of steps to induce the borrower to cure the delinquency and restore the loan to current status. With respect to residential real estate loans, we generally send a written notice of non-payment to the borrower 15, 30, 60 and 90 days after a loan is first past due. When a loan becomes 90

9

days past due, the loan is turned over to our attorneys to ensure that further collection activities are conducted in accordance with applicable laws and regulations. All loans past due 90 days are put on non-accrual and reported to the board of directors monthly. If our attorneys do not receive a response from the borrower, or if the terms of any payment plan established are not followed, then foreclosure proceedings will be implemented. Management submits an Asset Classification Report detailing delinquencies to the board of directors on a monthly basis.

Delinquent Loans.   The following table sets forth certain information regarding delinquencies in our loan portfolio.

​

Loans Delinquent For

​

​

​

30-89 Days

90 Days and Over

Total

​

Number

Amount

Number

Amount

Number

Amount

​

(Dollars in thousands)

At December 31, 2014

​

​

​

​

​

​

Real estate loans:

​

​

​

​

​

​

One- to four-family residential

​

—

​

$

—

​

2

​

$

297

​

2

​

$

297

Commercial and multi-family residential

​

—

​

​

—

​

—

​

​

—

​

—

​

​

—

Home equity lines of credit

​

—

​

​

—

​

—

​

​

—

​

—

​

​

—

Commercial

​

—

​

​

—

​

—

​

​

—

​

—

​

​

—

Other loans

​

—

​

​

—

​

—

​

​

—

​

—

​

​

—

Total

​

—

​

$

—

​

2

​

$

297

​

2

​

$

297

At December 31, 2013

​

​

​

​

​

​

Real estate loans:

​

​

​

​

​

​

One- to four-family residential

​

1

​

$

138

​

2

​

$

369

​

3

​

$

507

Commercial and multi-family residential

​

—

​

​

—

​

—

​

​

—

​

—

​

​

—

Home equity lines of credit

​

1

​

​

198

​

—

​

​

—

​

1

​

​

198

Commercial

​

—

​

​

—

​

—

​

​

—

​

—

​

​

—

Other loans

​

—

​

​

—

​

—

​

​

—

​

—

​

​

—

Total

​

2

​

$

336

​

2

​

$

369

​

4

​

$

705

10

Non-Performing Assets.   The table below sets forth the amounts and categories of our non-performing assets at the dates indicated.

​	At December 31,
​	2014			2013
​	(Dollars in thousands)
Non-accrual loans:	​			​
Real estate loans:	​			​
One- to four-family residential	​	$	432	​	$	369
Commercial and multi-family	​	​	—	​	​	—
Home equity lines of credit	​	​	—	​	​	—
Other	​	​	—	​	​	—
Total	​	​	432	​	​	369
Accruing loans 90 days or more past due:	​	$		​	$
Real estate loans:	​	​	​	​	​	​
One- to four-family residential	​	​	—	​	​	—
Commercial and multi-family	​	​	—	​	​	—
Home equity lines of credit	​	​	—	​	​	—
Other	​	​	—	​	​	—
Total loans 90 days or more past due	​	​	—	​	​	—
Total non-performing loans	​	$	432	​	$	369
Real estate owned	​	​	—	​	​	—
Other non-performing assets	​	​	—	​	​	—
Total non-performing assets	​	$	432	​	$	369
Troubled debt restructurings:	​			​
Real estate loans:	​			​
One- to four-family residential	​	$	—	​	$	—
Commercial and multi-family	​	​	—	​	​	—
Home equity lines of credit	​	​	—	​	​	—
Other	​	​	—	​	​	—
Total	​	$	—	​	$	—
Ratios:	​			​
Total non-performing loans to total loans	​	​	0.99%	​	​	0.92%
Total non-performing loans to total assets	​	​	0.46%	​	​	0.40%
Total non-performing assets to total assets	​	​	0.46%	​	​	0.40%

For the year ended December 31, 2014, gross interest income that would have been recorded had our non-accruing loans been current in accordance with their original terms was $29,600. Interest income recognized on such loans for the year ended December 31, 2014 was $15,700.

Non-performing loans totaled $432,000 and $369,000 at December 31, 2014 and December 31, 2013, respectively.

At December 31, 2014, we had one real estate loan totaling $454,000 that was categorized as special mention. This loan is seasoned, and at December 31, 2014 was adequately collateralized and current, but management deems the loan special mention due to the lack of current financial information.

11

Classified Assets.   Federal regulations require that each insured savings institution classify its assets on a regular basis. In addition, in connection with examinations of insured institutions, federal examiners have authority to identify problem assets and, if appropriate, classify them. There are three classifications for problem assets: “substandard,” “doubtful” and “loss.” Substandard assets have one or more defined weaknesses and are characterized by the distinct possibility that the insured institution will sustain some loss if the deficiencies are not corrected. Doubtful assets have the weaknesses of substandard assets with the additional characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions and values questionable, and there is a higher possibility of loss. An asset classified as a loss is considered uncollectible and of such little value that continuance as an asset of the institution is not warranted. Another category designated “special mention” also may be established and maintained for assets which do not currently expose an insured institution to a sufficient degree of risk to warrant classification as substandard, doubtful or loss. If a classified asset is deemed to be impaired with measurement of loss, Sunnyside Federal will establish a charge-off of the loan pursuant to Accounting Standards Codification Topic 310, “Receivables.”

The following table sets forth information regarding classified assets and special mention assets at December 31, 2014 and 2013.

​	At December 31,
​	2014			2013
​	(In thousands)
Classification of Assets:	​			​
Substandard	​	$	432	​	$	369
Doubtful	​	​	—	​	​	—
Loss	​	​	—	​	​	—
Total Classified Assets	​	$	432	​	$	369
Special Mention	​	$	454	​	$	639

Potential problem loans are loans that are currently performing and are not included in non-accrual loans above, but may be delinquent. These loans require an increased level of management attention, because we have serious doubts as to the ability of the borrower to comply with the present loan repayment terms and as a result such loans may be included at a later date in non-accrual loans. At December 31, 2014, we had no potential problem loans that are not accounted for above under “— Classified Assets.” Please see “— Non-Performing Assets” above for a discussion of our special mention loans at December 31, 2014.

Allowance for Loan Losses.   We maintain the allowance through provisions for loan losses that we charge to income. We charge losses on loans against the allowance for loan losses when we believe the collection of loan principal is unlikely. Recoveries on loans charged-off are restored to the allowance for loan losses. The allowance for loan losses is maintained at a level believed, to the best of management’s knowledge, to cover all known and inherent losses in the portfolio both probable and reasonable to estimate at each reporting date. The level of allowance for loan losses is based on management’s periodic review of the collectability of the loans principally in light of our historical experience, augmented by the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and current and anticipated economic conditions in the primary lending area. We evaluate our allowance for loan losses quarterly. We have not made any changes to the external factors in the calculation during the year as we believe the local economy is stabilized. We will continue to monitor all items involved in the allowance calculation closely.

In addition, the regulatory agencies, as an integral part of their examination and review process, periodically review our loan portfolios and the related allowance for loan losses. Regulatory agencies may require us to increase the allowance for loan losses based on their judgments of information available to them at the time of their examination, thereby adversely affecting our results of operations.

For 2014 and 2013, we recorded a provision of  $56,000 and $25,000, respectively. The allowance for loan losses was $396,000, or 0.9% of total loans, at December 31, 2014, compared to $340,000, or 0.8% of total loans, at December 31, 2013. At both dates, the level of our allowance reflects management’s view of

12

the risks inherent in the loan portfolio and high level of asset quality. Consistent with our business strategy, we intend to increase our originations of commercial and multi-family real estate and commercial loans. These types of loans generally bear higher risk than our one- to four-family residential real estate loans. Accordingly we would expect to increase our allowance for loans losses in the future as the balance of these types of loans increase in our portfolio.

The following table sets forth the analysis of the activity in the allowance for loan losses for the fiscal years indicated:

​	At or For the Years Ended December 31,
​	2014			2013
​	(In thousands)
Balance at beginning of year	​	$	340	​	$	314
Charge-offs:	​			​
Real estate loans:	​			​
One- to four-family residential	​	​	—	​	​	—
Commercial and multi-family	​	​	—	​	​	—
Home equity lines of credit	​	​	—	​	​	—
Other loans	​	​	—	​	​	—
Total charge-offs	​	​	—	​	​	—
Recoveries:	​			​
Real estate loans:	​			​
One- to four-family residential	​	​	—	​	​	—
Commercial and multi-family	​	​	—	​	​	—
Home equity lines of credit	​	​	—	​	​	—
Other loans	​	​	—	​	​	1
Total recoveries	​	​	—	​	​	1
Net charge-offs	​	​	—	​	​	(1)
Provision for loan losses	​	​	56	​	​	25
Balance at end of year	​	$	396	​	$	340
Ratios:	​			​
Net charge-offs to average loans outstanding	​	​	—%	​	​	—%
Allowance for loan losses to non-performing loans at end of year	​	​	91.7%	​	​	92.1%
Allowance for loan losses to total loans at end of year	​	​	0.9%	​	​	0.8%

13

Allocation of Allowance for Loan Losses.   The following table sets forth the allocation of allowance for loan losses by loan category at the dates indicated. The table also reflects each loan category as a percentage of total loans receivable. The allocation of the allowance by category is not necessarily indicative of future losses and does not restrict the use of the allowance to absorb losses in any category.

​

At December 31,

​

2014

2013

​

Amount

Percent of Allowance to Total Allowance

Percent of Loans in Category to Total Loans

Amount

Percent of Allowance to Total Allowance

Percent of Loans in Category to Total Loans

​

(Dollars in thousands)

Real estate loans:

​

​

​

​

​

​

One- to four-family residential

​

$

258

​

65.1%

​

72.3%

​

$

295

​

86.8%

​

83.2%

Commercial and multi-family residential

​

​

91

​

23.0

​

21.6

​

​

34

​

10.0

​

13.8

Home equity lines of credit

​

​

3

​

.8

​

.8

​

​

6

​

1.8

​

1.7

Other loans

​

​

32

​

8.1

​

5.3

​

​

5

​

1.4

​

1.3

Total allocated allowance

​

​

384

​

97.0

​

100.0

​

​

340

​

—

​

100.0

Unallocated allowance

​

​

12

​

3.0

​

—

​

​

—

​

—

​

—

Total allowance for loan losses

​

$

396

​

100.0%

​

100.0%

​

$

340

​

100.0%

​

100.0%

Securities Activities

General.   Our investment policy is established by the board of directors. The objectives of the policy are to: (i) ensure adequate liquidity for loan demand and deposit fluctuations, and to allow us to alter our liquidity position to meet both day-to-day and long-term changes in assets and liabilities; (ii) manage interest rate risk in accordance with our interest rate risk policy; (iii) provide collateral for pledging requirements; (iv) maximize return on our investments; and (v) maintain a balance of high quality diversified investments to minimize risk.

Our investment committee, consisting of our President and Chief Executive Officer, our Chief Financial Officer, our Chief Operating Officer and one outside director is responsible for implementing our investment policy, including approval of investment strategies and monitoring investment performance. Our President and Chief Executive Officer and our Chief Financial Officer are each authorized to execute purchases or sales of securities of up to $2.0 million. The board of directors regularly reviews our investment strategies and the market value of our investment portfolio.

We account for investment and mortgage-backed securities in accordance with Accounting Standards Codification Topic 320, “Investments — Debt and Equity Securities.” Accounting Standards Codification 320 requires that investments be categorized as held-to maturity, trading, or available for sale. Our decision to classify certain of our securities as available-for-sale is based on our need to meet daily liquidity needs and to take advantage of profits that may occur from time to time.

Federally chartered savings institutions have authority to invest in various types of assets, including government-sponsored enterprise obligations, securities of various federal agencies, residential mortgage-backed securities, certain certificates of deposit of insured financial institutions, overnight and short-term loans to other banks, corporate debt instruments, debt instruments of municipalities and Fannie Mae and Freddie Mac equity securities. At December 31, 2014, our investment portfolio consisted of securities and mortgage-backed securities issued by U.S. Government agencies or U.S. Government-sponsored enterprises and state and political subdivisions. At December 31, 2014, we owned $107,500 in Federal Home Loan Bank of New York stock. As a member of Federal Home Loan Bank of New York, we are required to purchase stock in the Federal Home Loan Bank of New York. At December 31, 2014, we had no investments in a single company or entity (other than an agency of the U.S. Government or a U.S. Government-sponsored enterprise) that had an aggregate book value in excess of 10% of our equity.

14

The following table sets forth the amortized cost and fair value of our securities portfolio (excluding common stock we hold in the Federal Home Loan Bank of New York and in the Atlantic Central Bankers Bank) at the dates indicated.

​	At December 31,
​	2014						2013
​	Amortized Cost			Fair Value			Amortized Cost			Fair Value
​	(Dollars in thousands)
Securities held to maturity:	​			​			​			​
United States government and agency securities	​	$	2,000	​	$	2,077	​	$	—	​	$	—
Mortgage-backed securities	​	​	3,337	​	​	3,476	​	​	4,177	​	​	4,302
State, county and municipal securities	​	​	817	​	​	825	​	​	490	​	​	507
Total securities held to maturity	​	$	6,154	​	$	6,378	​	$	4,667	​	$	4,809
Securities available for sale:	​			​			​			​
Unites States government and agency securities	​	$	5,997	​	$	5,941	​	$	3,997	​	$	3,772
Mortgage-backed securities	​	​	28,527	​	​	28,571	​	​	35,139	​	​	34,468
Total securities available for sale	​	$	34,524	​	$	34,512	​	$	39,136	​	$	38,240

Portfolio Maturities and Yields.   The composition and maturities of the investment securities portfolio at December 31, 2014 are summarized in the following table. Maturities are based on the final contractual payment dates, and do not reflect the impact of prepayments or early redemptions that may occur.

​	One Year or Less					More than One Year through Five Years					More than Five Years through Ten Years					More than Ten Years					Total Securities
​	Amortized Cost			Weighted Average Yield		Amortized Cost			Weighted Average Yield		Amortized Cost			Weighted Average Yield		Amortized Cost			Weighted Average Yield		Amortized Cost			Fair Value			Weighted Average Yield
​	(Dollars in thousands)
Securities held to maturity:	​			​		​			​		​			​		​			​		​			​			​
US government and agency securities	​	$	—	​	—%	​	$	—	​	—%	​	$	—	​	—%	​	$	2,000	​	4.00%	​	$	2,000	​	$	2,077	​	4.00%
Mortgage-backed securities	​	$	—	​	—%	​	$	—	​	—%	​	$	—	​	—%	​	$	3,337	​	1.63%	​	$	3,337	​	$	3,476	​	1.63%
State, county and municipal securities	​	​	—	​	—%	​	​	392	​	2.55%	​	​	79	​	4.14%	​	$	346	​	3.27%	​	$	817	​	$	825	​	3.01%
Total securities held to maturity	​	$	—	​	—%	​	$	392	​	2.55%	​	$	79	​	4.14%	​	$	5,683	​	2.56%	​	$	6,154	​	$	6,378	​	2.58%
Securities available for sale	​			​		​			​		​			​		​			​		​			​			​
US government and agency securities	​	$	—	​	—%	​	$	3,997	​	1.48%	​	$	2,000	​	2.59%	​	$	—	​	—%	​	$	5,997	​	$	5,941	​	1.85%
Mortgage-backed	​	​	—	​	—%	​	​	—	​	—%	​	​	6,770	​	1.66%	​	​	21,757	​	2.10%	​	​	28,527	​	​	28,571	​	2.00%
Total securities available for sale	​	$	—	​	—%	​	$	3,997	​	1.48%	​	$	8,770	​	1.87%	​	$	21,757	​	2.10%	​	$	34,524	​	$	34,512	​	1.97%

Sources of Funds

General.   Deposits, scheduled amortization and prepayments of loan principal, maturities and calls of securities and funds provided by operations are our primary sources of funds for use in lending, investing and for other general purposes. We historically have not used Federal Home Loan Bank advances to fund our operations, and we had no such advances as of December 31, 2014 or 2013.

15

Deposits.   We offer deposit products having a range of interest rates and terms. We currently offer statement savings accounts, NOW accounts, noninterest-bearing demand accounts, money market accounts and certificates of deposit. Our strategic plan includes a greater emphasis on developing commercial business activities, both deposit and lending customer relationships.

Deposit flows are significantly influenced by general and local economic conditions, changes in prevailing interest rates, internal pricing decisions and competition. Our deposits are primarily obtained from areas surrounding our branch office. In order to attract and retain deposits we rely on paying competitive interest rates and providing quality service.

Based on our experience, we believe that our deposits are relatively stable. However, the ability to attract and maintain deposits and the rates paid on these deposits, has been and will continue to be significantly affected by market conditions. At December 31, 2014, $31.7 million, or 39.8% of our total deposit accounts were certificates of deposit, of which $14.0 million had maturities of one year or less.

The following tables set forth the distribution of our average deposit accounts, by account type, for the years indicated.

​

2014

2013

​

Average Balance

Percent

Weighted Average Rate

Average Balance

Percent

Weighted Average Rate

​

(In thousands)

Deposit Type

​

​

​

​

​

​

Non interest-bearing checking

​

$

4,729

​

6.0%

​

—%

​

$

4,430

​

5.4%

​

—%

NOW

​

​

10,345

​

13.1

​

0.05

​

​

10,083

​

12.3

​

0.05

Passbook

​

​

28,192

​

35.8

​

0.11

​

​

29,303

​

35.6

​

0.11

Money Market

​

​

3,471

​

4.4

​

0.10

​

​

3,415

​

4.1

​

0.15

Certificates of Deposit

​

​

32,036

​

40.7

​

1.04

​

​

35,066

​

42.6

​

1.47

Total Deposits

​

$

78,773

​

100.00%

​

0.46%

​

$

82,297

​

100.00%

​

0.72%

The following table sets forth certificates of deposit classified by interest rate as of the dates indicated.

​	At December 31,
​	2014			2013
​	(In thousands)
Interest Rate:	​			​
Less than 2.00%	​	$	22,681	​	$	19,853
2.00% to 2.99%	​	​	9,020	​	​	8,900
3.00% to 3.99%	​	​	—	​	​	351
4.00% to 4.99%	​	​	—	​	​	3,490
5.00% and above	​	​	—	​	​	—
Total	​	$	31,701	​	$	32,594

16

Maturities of Certificates of Deposit Accounts.   The following table sets forth the amount and maturities of certificates of deposit accounts at the dates indicated.

​

At December 31, 2014

​

Period to Maturity

​

Less Than or Equal to One Year

More Than One to Two Years

More Than Two to Three Years

More Than Three Years

Total

Percent of Total

​

(Dollars in thousands)

Interest Rate Range:

​

​

​

​

​

​

Less than 2.00%

​

$

13,813

​

$

6,053

​

$

699

​

$

2,116

​

$

22,681

​

72%

2.00% to 2.99%

​

​

140

​

​

5,713

​

​

3,067

​

​

100

​

​

9,020

​

28

3.00% to 3.99%

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

—

4.00% to 4.99%

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

—

Total

​

$

13,953

​

$

11,766

​

$

3,766

​

$

2,216

​

$

31,701

​

100.0%

As of December 31, 2014, the aggregate amount of outstanding certificates of deposit at Sunnyside Federal in amounts greater than or equal to $100,000 was approximately $11.6 million. The following table presents the maturity of these certificates of deposit at such date.

Period to Maturity	At December 31, 2014
​	(In thousands)
Three months or less	​	$	2,702
Over three through six months	​	​	800
Over six months through one year	​	​	1,208
Over one year to three years	​	​	5,929
Over three years	​	​	946
Total	​	$	11,585

Borrowing Capacity.   As a member of the Federal Home Loan Bank of New York, Sunnyside Federal is eligible to obtain advances from the Federal Home Loan Bank by pledging investment securities as collateral or mortgage loans, provided certain standards related to credit-worthiness have been met. Federal Home Loan Bank advances are available pursuant to several credit programs, each of which has its own interest rate and range of maturities. Additionally, at December 31, 2014, we had the ability to borrow up to $2.0 million on a Fed Funds line of credit with Atlantic Community Bankers Bank. We have historically not relied on Federal Home Loan Bank advances or other borrowings as a funding source, and we had no such borrowings at December 31, 2014 or 2013.

Expense and Tax Allocation

Sunnyside Federal has entered into an agreement with Sunnyside Bancorp to provide it with certain administrative support services for compensation not less than the fair market value of the services provided. In addition, Sunnyside Federal and Sunnyside Bancorp have entered into an agreement to establish a method for allocating and for reimbursing the payment of their consolidated tax liability.

Employees

As of December 31, 2014, we had 14 full-time equivalent employees. Our employees are not represented by any collective bargaining group. Management believes that we have a good working relationship with our employees.

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REGULATION AND SUPERVISION

General

As a federal savings association, Sunnyside Federal is subject to examination and regulation by the Office of the Comptroller of the Currency (“OCC”), and is also subject to examination by the Federal Deposit Insurance Corporation (“FDIC”). The federal system of regulation and supervision establishes a comprehensive framework of activities in which Sunnyside Federal may engage and is intended primarily for the protection of depositors and the FDIC’s Deposit Insurance Fund.

Sunnyside Federal also is regulated to a lesser extent by the Board of Governors of the Federal Reserve System, or the “Federal Reserve Board”, which governs the reserves to be maintained against deposits and other matters. In addition, Sunnyside Federal is a member of and owns stock in the Federal Home Loan Bank of New York, which is one of the twelve regional banks in the Federal Home Loan Bank System. Sunnyside Federal’s relationship with its depositors and borrowers also is regulated to a great extent by federal law and, to a lesser extent, state law, including in matters concerning the ownership of deposit accounts and the form and content of Sunnyside Federal’s loan documents.

As a savings and loan holding company, Sunnyside Bancorp is subject to examination and supervision by, and is required to file certain reports with, the Federal Reserve Board. Sunnyside Bancorp is also subject to the rules and regulations of the Securities and Exchange Commission under the federal securities laws.

Set forth below are certain material regulatory requirements that are applicable to Sunnyside Federal and Sunnyside Bancorp. This description of statutes and regulations is not intended to be a complete description of such statutes and regulations and their effects on Sunnyside Federal and Sunnyside Bancorp. Any change in these laws or regulations, whether by Congress or the applicable regulatory agencies, could have a material adverse impact on Sunnyside Bancorp, Sunnyside Federal and their operations.

Dodd-Frank Act

The Dodd-Frank Act made significant changes to the regulatory structure for depository institutions and their holding companies, as well as changes that affect the lending, investments and other operations of all depository institutions. The Dodd-Frank Act required the Federal Reserve Board to set minimum capital levels for both bank holding companies and savings and loan holding companies that are as stringent as those required for the insured depository subsidiaries, and the components of Tier 1 capital for holding companies were restricted to capital instruments that were then currently considered to be Tier 1 capital for insured depository institutions. The legislation also established a floor for capital of insured depository institutions that cannot be lower than the standards in effect upon passage, and directed the federal banking regulators to implement new leverage and capital requirements that take into account off-balance sheet activities and other risks, including risks relating to securitized products and derivatives.

The Dodd-Frank Act created a new Consumer Financial Protection Bureau with broad powers to supervise and enforce consumer protection laws. The Consumer Financial Protection Bureau has broad rule-making authority for a wide range of consumer protection laws that apply to all banks and savings institutions such as Sunnyside Federal, including the authority to prohibit “unfair, deceptive or abusive” acts and practices. The Consumer Financial Protection Bureau has examination and enforcement authority over all banks and savings institutions with more than $10 billion in assets. Banks and savings institutions with $10 billion or less in assets are still examined for compliance by their applicable bank regulators. The new legislation also weakened the federal preemption available for national banks and federal savings associations, and gave state attorneys general the ability to enforce applicable federal consumer protection laws.

The Dodd-Frank Act broadened the base for FDIC insurance assessments. Assessments are now based on the average consolidated total assets less tangible equity capital of a financial institution, rather than on total deposits. The legislation also permanently increased the maximum amount of deposit insurance for banks, savings institutions and credit unions to $250,000 per depositor. The Dodd-Frank Act increased stockholder influence over boards of directors by requiring companies to give stockholders a non-binding vote on executive compensation and so-called “golden parachute” payments. The legislation also directs the Federal Reserve Board to promulgate rules prohibiting excessive compensation paid to bank holding

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company executives, regardless of whether the company is publicly traded or not. Further, the legislation requires that originators of securitized loans retain a percentage of the risk for transferred loans, directs the Federal Reserve Board to regulate pricing of certain debit card interchange fees and contains a number of reforms related to mortgage originations.

Federal Banking Regulation

Business Activities.   A federal savings association derives its lending and investment powers from the Home Owners’ Loan Act, as amended, and applicable federal regulations. Under these laws and regulations, Sunnyside Federal may invest in mortgage loans secured by residential and commercial real estate, commercial business and consumer loans, certain types of debt securities and certain other assets, subject to applicable limits. The Dodd-Frank Act authorized, for the first time, the payment of interest on commercial checking accounts, effective July 21, 2011. Sunnyside Federal may also establish subsidiaries that may engage in certain activities not otherwise permissible for Sunnyside Federal, including real estate investment and securities and insurance brokerage.

Capital Requirements.   Federal regulations require savings associations to meet three minimum capital standards: a 1.5% tangible capital ratio, a 4% core capital to assets leverage ratio (3% for savings associations receiving the highest rating on the CAMELS rating system), and an 8% risk-based capital ratio.

The risk-based capital standard for savings associations requires the maintenance of Tier 1 (core) and total capital (which is defined as core capital and supplementary capital) to risk-weighted assets of at least 4% and 8%, respectively. In determining the amount of risk-weighted assets, all assets, including certain off-balance sheet assets, are multiplied by a risk-weight factor of 0% to 200%, assigned by the regulations, based on the risks believed inherent in the type of asset. Core capital is defined as common stockholders’ equity (including retained earnings), certain noncumulative perpetual preferred stock and related surplus and minority interests in equity accounts of consolidated subsidiaries, less intangibles other than certain mortgage servicing rights and credit card relationships. The components of supplementary capital include cumulative preferred stock, long-term perpetual preferred stock, mandatory convertible securities, subordinated debt and intermediate preferred stock, the allowance for loan and lease losses limited to a maximum of 1.25% of risk-weighted assets and up to 45% of net unrealized gains on available-for-sale equity securities with readily determinable fair market values. Overall, the amount of supplementary capital included as part of total capital cannot exceed 100% of core capital. Additionally, a savings association that retains credit risk in connection with an asset sale is required to maintain additional regulatory capital because of the purchaser’s recourse against the savings association. In assessing an institution’s capital adequacy, the Office of the Comptroller of the Currency takes into consideration not only these numeric factors, but qualitative factors as well and has the authority to establish higher capital requirements for individual associations where necessary.

At December 31, 2014, Sunnyside Federal’s capital exceeded all applicable requirements.

In July 2013, the OCC and the other federal bank regulatory agencies issued a final rule that will revise their leverage and risk-based capital requirements and the method for calculating risk-weighted assets to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Act. The final rule applies to all depository institutions, top-tier bank holding companies with total consolidated assets of  $500 million or more and top-tier savings and loan holding companies. Among other things, the rule establishes a new common equity Tier 1 minimum capital requirement (4.5% of risk-weighted assets), increases the minimum Tier 1 capital to risk-based assets requirement (from 4% to 6% of risk-weighted assets) and assigns a higher risk weight (150%) to exposures that are more than 90 days past due or are on nonaccrual status and to certain commercial real estate facilities that finance the acquisition, development or construction of real property. The final rule also requires unrealized gains and losses on certain “available-for-sale” securities holdings to be included for purposes of calculating regulatory capital requirements unless a one-time opt-in or opt-out is exercised. The rule limits a banking organization’s capital distributions and certain discretionary bonus payments if the banking organization does not hold a “capital conservation buffer” consisting of 2.5% of common equity Tier 1 capital to risk-weighted assets in addition to the amount necessary to meet its minimum risk-based capital requirements. The final rule becomes effective for the Bank on January 1, 2015. The capital conservation buffer requirement will be phased in beginning January 1, 2016 and ending January 1, 2019,

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when the full capital conservation buffer requirement will be effective. These changes are not expected to have a material impact on Sunnyside Federal’s capital levels.

Loans-to-One Borrower.   Generally, a federal savings association may not make a loan or extend credit to a single or related group of borrowers in excess of 15% of unimpaired capital and surplus. An additional amount may be loaned, equal to 10% of unimpaired capital and surplus, if the loan is secured by readily marketable collateral, which generally does not include real estate. As of December 31, 2014, Sunnyside Federal was in compliance with the loans-to-one borrower limitations.

Qualified Thrift Lender Test.   As a federal savings association, Sunnyside Federal must satisfy the qualified thrift lender, or “QTL,” test. Under the QTL test, Sunnyside Federal must maintain at least 65% of its “portfolio assets” in “qualified thrift investments” (primarily residential mortgages and related investments, including mortgage-backed securities) in at least nine months of the most recent 12-month period. “Portfolio assets” generally means total assets of a savings association, less the sum of specified liquid assets up to 20% of total assets, goodwill and other intangible assets, and the value of property used in the conduct of the savings association’s business.

Sunnyside Federal also may satisfy the QTL test by qualifying as a “domestic building and loan association” as defined in the Internal Revenue Code of 1986, as amended.

A savings association that fails the qualified thrift lender test must operate under specified restrictions set forth in the Home Owners’ Loan Act. The Dodd-Frank Act made noncompliance with the QTL test subject to agency enforcement action for a violation of law. At December 31, 2014, Sunnyside Federal satisfied the QTL test.

Capital Distributions.   Federal regulations govern capital distributions by a federal savings association, which include cash dividends, stock repurchases and other transactions charged to the savings association’s capital account. A federal savings association must file an application for approval of a capital distribution if:

•

the total capital distributions for the applicable calendar year exceed the sum of the savings association’s net income for that year to date plus the savings association’s retained net income for the preceding two years;

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the savings association would not be at least adequately capitalized following the distribution;

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the distribution would violate any applicable statute, regulation, agreement or regulatory condition; or

•

the savings association is not eligible for expedited treatment of its filings.

Even if an application is not otherwise required, every savings association that is a subsidiary of a savings and loan holding company, such as Sunnyside Federal, must still file a notice with the Federal Reserve Board at least 30 days before the board of directors declares a dividend or approves a capital distribution.

A notice or application related to a capital distribution may be disapproved if:

•

the federal savings association would be undercapitalized following the distribution;

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the proposed capital distribution raises safety and soundness concerns; or

•

the capital distribution would violate a prohibition contained in any statute, regulation or agreement.

In addition, the Federal Deposit Insurance Act provides that an insured depository institution shall not make any capital distribution if, after making such distribution, the institution would fail to meet any applicable regulatory capital requirement. A federal savings association also may not make a capital distribution that would reduce its regulatory capital below the amount required for the liquidation account established in connection with its conversion to stock form.

Community Reinvestment Act and Fair Lending Laws.   All federal savings associations have a responsibility under the Community Reinvestment Act and related regulations to help meet the credit needs of their communities, including low- and moderate-income borrowers. In connection with its examination

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of a federal savings association, the Office of the Comptroller of the Currency is required to assess the federal savings association’s record of compliance with the Community Reinvestment Act. A savings association’s failure to comply with the provisions of the Community Reinvestment Act could, at a minimum, result in denial of certain corporate applications such as branches or mergers, or in restrictions on its activities. In addition, the Equal Credit Opportunity Act and the Fair Housing Act prohibit lenders from discriminating in their lending practices on the basis of characteristics specified in those statutes. The failure to comply with the Equal Credit Opportunity Act and the Fair Housing Act could result in enforcement actions by the Office of the Comptroller of the Currency, as well as other federal regulatory agencies and the Department of Justice.

The Community Reinvestment Act requires all institutions insured by the FDIC to publicly disclose their rating. Sunnyside Federal received a “satisfactory” Community Reinvestment Act rating in its most recent federal examination.

Transactions with Related Parties.   A federal savings association’s authority to engage in transactions with its affiliates is limited by Sections 23A and 23B of the Federal Reserve Act and federal regulation. An affiliate is generally a company that controls, or is under common control with an insured depository institution such as Sunnyside Federal. Sunnyside Bancorp is an affiliate of Sunnyside Federal because of its control of Sunnyside Federal. In general, transactions between an insured depository institution and its affiliates are subject to certain quantitative limits and collateral requirements. In addition, federal regulations prohibit a savings association from lending to any of its affiliates that are engaged in activities that are not permissible for bank holding companies and from purchasing the securities of any affiliate, other than a subsidiary. Finally, transactions with affiliates must be consistent with safe and sound banking practices, not involve the purchase of low-quality assets and be on terms that are as favorable to the institution as comparable transactions with non-affiliates. Federal regulations require savings associations to maintain detailed records of all transactions with affiliates.

Sunnyside Federal’s authority to extend credit to its directors, executive officers and 10% stockholders, as well as to entities controlled by such persons, is currently governed by the requirements of Sections 22(g) and 22(h) of the Federal Reserve Act and Regulation O of the Federal Reserve Board. Among other things, these provisions generally require that extensions of credit to insiders:

•

be made on terms that are substantially the same as, and follow credit underwriting procedures that are not less stringent than, those prevailing for comparable transactions with unaffiliated persons and that do not involve more than the normal risk of repayment or present other unfavorable features; and

•

not exceed certain limitations on the amount of credit extended to such persons, individually and in the aggregate, which limits are based, in part, on the amount of Sunnyside Federal’s capital.

In addition, extensions of credit in excess of certain limits must be approved by Sunnyside Federal’s board of directors. Extensions of credit to executive officers are subject to additional limits based on the type of extension involved.

Enforcement.   The Office of the Comptroller of the Currency has primary enforcement responsibility over federal savings associations and has authority to bring enforcement action against all “institution-affiliated parties,” including directors, officers, stockholders, attorneys, appraisers and accountants who knowingly or recklessly participate in wrongful action likely to have an adverse effect on a federal savings association. Formal enforcement action by the Office of the Comptroller of the Currency may range from the issuance of a capital directive or cease and desist order to removal of officers and/or directors of the institution and the appointment of a receiver or conservator. Civil penalties cover a wide range of violations and actions, and range up to $25,000 per day, unless a finding of reckless disregard is made, in which case penalties may be as high as $1 million per day. The FDIC also has the authority to terminate deposit insurance or recommend to the Office of the Comptroller of the Currency that enforcement action be taken with respect to a particular savings association. If such action is not taken, the FDIC has authority to take the action under specified circumstances.

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Standards for Safety and Soundness.   Federal law requires each federal banking agency to prescribe certain standards for all insured depository institutions. These standards relate to, among other things, internal controls, information systems and audit systems, loan documentation, credit underwriting, interest rate risk exposure, asset growth, compensation and other operational and managerial standards as the agency deems appropriate. Interagency guidelines set forth the safety and soundness standards that the federal banking agencies use to identify and address problems at insured depository institutions before capital becomes impaired. If the appropriate federal banking agency determines that an institution fails to meet any standard prescribed by the guidelines, the agency may require the institution to submit to the agency an acceptable plan to achieve compliance with the standard. If an institution fails to meet these standards, the appropriate federal banking agency may require the institution to implement an acceptable compliance plan. Failure to implement such a plan can result in further enforcement action, including the issuance of a cease and desist order or the imposition of civil money penalties.

Prompt Corrective Action Regulations.   Under the Federal Prompt Corrective Action statute, the Office of the Comptroller of the Currency is required to take supervisory actions against undercapitalized savings institutions under its jurisdiction, the severity of which depends upon the institution’s level of capital. A savings institution that has total risk-based capital of less than 8% or a leverage ratio or a Tier 1 risk-based capital ratio that generally is less than 4% is considered to be undercapitalized. A savings institution that has total risk-based capital less than 6%, a Tier 1 core risk-based capital ratio of less than 3% or a leverage ratio that is less than 3% is considered to be “significantly undercapitalized.” A savings institution that has a tangible capital to assets ratio equal to or less than 2% is deemed to be “critically undercapitalized.”

Generally, the Office of the Comptroller of the Currency is required to appoint a receiver or conservator for a savings association that is “critically undercapitalized” within specific time frames. The regulations also provide that a capital restoration plan must be filed with the Office of the Comptroller of the Currency within 45 days of the date that a federal savings association is deemed to have received notice that it is “undercapitalized,” “significantly undercapitalized” or “critically undercapitalized.” Any holding company of a federal savings association that is required to submit a capital restoration plan must guarantee performance under the plan in an amount of up to the lesser of 5% of the savings association’s assets at the time it was deemed to be undercapitalized by the Office of the Comptroller of the Currency or the amount necessary to restore the savings association to adequately capitalized status. This guarantee remains in place until the Office of the Comptroller of the Currency notifies the savings association that it has maintained adequately capitalized status for each of four consecutive calendar quarters. Institutions that are undercapitalized become subject to certain mandatory measures such as a restrictions on capital distributions and asset growth. The Office of the Comptroller of the Currency may also take any one of a number of discretionary supervisory actions against undercapitalized federal savings associations, including the issuance of a capital directive and the replacement of senior executive officers and directors.

At December 31, 2014, Sunnyside Federal met the criteria for being considered “well capitalized.”

Insurance of Deposit Accounts.   The Deposit Insurance Fund (“DIF”) of the FDIC insures deposits at FDIC-insured depository institutions, such as Sunnyside Federal. Deposit accounts in Sunnyside Federal are insured by the FDIC, generally up to a maximum of  $250,000 per separately insured depositor and up to a maximum of  $250,000 for self-directed retirement accounts.

The FDIC charges insured depository institutions premiums to maintain the DIF. Under the FDIC’s risk-based assessment system, insured institutions are assigned to one of four risk categories based on supervisory evaluations, regulatory capital levels, and certain other risk factors. Rates are based on each institution’s risk category and certain specified risk adjustments. Stronger institutions pay lower rates while riskier institutions pay higher rates. Assessment rates range from 2.5 to 45 basis points of an institution’s total assets less tangible capital.

The Dodd-Frank Act increased the minimum target ratio for the DIF from 1.15% of estimated insured deposits to 1.35% of estimated insured deposits. The FDIC must seek to achieve the 1.35% ratio by September 30, 2020. Insured institutions with assets of  $10 billion or more are supposed to fund the increase. The Dodd-Frank Act eliminated the 1.5% maximum fund ratio, instead leaving it to the discretion of the FDIC, and the FDIC has exercised that discretion by establishing a long-term fund ratio of 2%.

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In addition to the FDIC assessments, the Financing Corporation (“FICO”) is authorized to impose and collect, with the approval of the FDIC, assessments for anticipated payments, issuance costs, and custodial fees on bonds issued by the FICO in the 1980s to recapitalize the former Federal Savings and Loan Insurance Corporation. The bonds issued by the FICO are due to mature in 2017 through 2019. For the quarter ended December 31, 2014, the annualized FICO assessment was equal to 60 basis points of an institution’s total assets less tangible capital.

Insurance of deposits may be terminated by the FDIC upon a finding that an institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order, or condition imposed by the FDIC. Sunnyside Federal does not know of any practice, condition, or violation that could lead to termination of its deposit insurance.

Prohibitions Against Tying Arrangements.   Federal savings associations are prohibited, subject to some exceptions, from extending credit to or offering any other service, or fixing or varying the consideration for such extension of credit or service, on the condition that the customer obtain some additional service from the institution or its affiliates or not obtain services of a competitor of the institution.

Federal Home Loan Bank System.   Sunnyside Federal is a member of the Federal Home Loan Bank System, which consists of 12 regional Federal Home Loan Banks. The Federal Home Loan Bank System provides a central credit facility primarily for member institutions as well as other entities involved in home mortgage lending. As a member of the Federal Home Loan Bank of New York, Sunnyside Federal is required to acquire and hold shares of capital stock in the Federal Home Loan Bank. As of December 31, 2014, Sunnyside Federal was in compliance with this requirement. While Sunnyside Federal’s ability to borrow from the Federal Home Loan Bank of New York provides an additional source of liquidity, Sunnyside Federal has historically limited its use of advances from the Federal Home Loan Bank to fund its operations.

Qualified Mortgages and Retention of Credit Risk.   The Consumer Financial Protection Bureau has issued a rule designed to clarify for lenders how they can avoid legal liability under the Dodd-Frank Act, which would hold lenders accountable for ensuring a borrower’s ability to repay a mortgage. Loans that meet this “qualified mortgage” definition will be presumed to have complied with the new ability-to-repay standard. Under the Consumer Financial Protection Bureau’s rule, a “qualified mortgage” loan must not contain certain specified features, including:

•

excessive upfront points and fees (those exceeding 3% of the total loan amount, less “bona fide discount points” for prime loans);

•

interest-only payments;

•

negative-amortization; and

•

terms longer than 30 years.

Also, to qualify as a “qualified mortgage,” a borrower’s total monthly debt-to-income ratio may not exceed 43%. Lenders must also verify and document the income and financial resources relied upon to qualify the borrower for the loan and underwrite the loan based on a fully amortizing payment schedule and maximum interest rate during the first five years, taking into account all applicable taxes, insurance and assessments. The Consumer Financial Protection Bureau’s rule on qualified mortgages could limit our ability or desire to make certain types of loans or loans to certain borrowers, or could make it more expensive/and or time consuming to make these loans, which could limit our growth or profitability.

In addition, the Dodd-Frank Act requires the regulatory agencies to issue regulations that require securitizers of loans to retain not less than 5% of the credit risk for any asset that is not a “qualified residential mortgage.” The regulatory agencies have issued a proposed rule to implement this requirement. The Dodd-Frank Act provides that the definition of  “qualified residential mortgage” can be no broader than the definition of  “qualified mortgage” issued by the Consumer Financial Protection Bureau for purposes of its regulations (as described above). Although the final rule with respect to the retention of credit risk has not yet been issued, the final rule could have a significant effect on the secondary market for loans and the types of loans we originate, and restrict our ability to make loans.

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Other Regulations

Interest and other charges collected or contracted for by Sunnyside Federal are subject to state usury laws and federal laws concerning interest rates. Sunnyside Federal’s operations are also subject to federal laws applicable to credit transactions, such as the:

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Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers;

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Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves;

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Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit;

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Fair Credit Reporting Act, governing the use and provision of information to credit reporting agencies;

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Fair Debt Collection Act, governing the manner in which consumer debts may be collected by collection agencies;

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Truth in Savings Act; and

•

rules and regulations of the various federal agencies charged with the responsibility of implementing such federal laws.

The operations of Sunnyside Federal also are subject to the:

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Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records;

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Electronic Funds Transfer Act and Regulation E promulgated thereunder, which govern automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services;

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Check Clearing for the 21st Century Act (also known as “Check 21”), which gives “substitute checks,” such as digital check images and copies made from that image, the same legal standing as the original paper check;

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The USA PATRIOT Act, which requires savings associations to, among other things, establish broadened anti-money laundering compliance programs, and due diligence policies and controls to ensure the detection and reporting of money laundering. Such required compliance programs are intended to supplement existing compliance requirements that also apply to financial institutions under the Association Secrecy Act and the Office of Foreign Assets Control regulations; and

•

The Gramm-Leach-Bliley Act, which places limitations on the sharing of consumer financial information by financial institutions with unaffiliated third parties. Specifically, the Gramm-Leach-Bliley Act requires all financial institutions offering financial products or services to retail customers to provide such customers with the financial institution’s privacy policy and provide such customers the opportunity to “opt out” of the sharing of certain personal financial information with unaffiliated third parties.

Holding Company Regulation

General.   Sunnyside Bancorp is a non-diversified savings and loan holding company within the meaning of the Home Owners’ Loan Act. As such, Sunnyside Bancorp is registered with the Federal Reserve Board and is subject to regulations, examinations, supervision and reporting requirements applicable to savings and loan holding companies. In addition, the Federal Reserve Board has enforcement authority over Sunnyside Bancorp and its non-savings institution subsidiaries. Among other things, this authority permits the Federal Reserve Board to restrict or prohibit activities that are determined to be a serious risk to the subsidiary savings institution.

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Permissible Activities.   The business activities of Sunnyside Bancorp are generally limited to those activities permissible for financial holding companies under Section 4(k) of the Bank Holding Company Act of 1956, as amended, provided certain conditions are met, or for multiple savings and loan holding companies. A financial holding company may engage in activities that are financial in nature, including underwriting equity securities and insurance as well as activities that are incidental to financial activities or complementary to a financial activity. A multiple savings and loan holding company is generally limited to activities permissible for bank holding companies under Section 4(c)(8) of the Bank Holding Company Act, subject to regulatory approval, and certain additional activities authorized by federal regulations.

Federal law prohibits a savings and loan holding company, including Sunnyside Bancorp, directly or indirectly, or through one or more subsidiaries, from acquiring more than 5% of another savings institution or holding company thereof, without prior regulatory approval. It also prohibits the acquisition or retention of, with certain exceptions, more than 5% of a non-subsidiary company engaged in activities that are not closely related to banking or financial in nature, or acquiring or retaining control of an institution that is not federally insured. In evaluating applications by holding companies to acquire savings institutions, the Federal Reserve Board must consider the financial and managerial resources, future prospects of the company and institution involved, the effect of the acquisition on the risk to the federal deposit insurance fund, the convenience and needs of the community and competitive factors.

The Federal Reserve Board is prohibited from approving any acquisition that would result in a multiple savings and loan holding company controlling savings institutions in more than one state, subject to two exceptions:

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the approval of interstate supervisory acquisitions by savings and loan holding companies; and

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the acquisition of a savings institution in another state if the laws of the state of the target savings institution specifically permit such acquisition.

The states vary in the extent to which they permit interstate savings and loan holding company acquisitions.

Capital.   Savings and loan holding companies have not historically been subjected to consolidated regulatory capital requirements. However, the Dodd-Frank Act required the Federal Reserve Board to set for all depository institution holding companies minimum consolidated capital levels that are as stringent as those required for the insured depository subsidiaries. The previously discussed final rule regarding regulatory capital requirements implements the Dodd-Frank Act as to savings and loan holding companies. Consolidated regulatory capital requirements identical to those applicable to the subsidiary depository institutions will apply to savings and loan holding companies as of January 1, 2015. As is the case with institutions themselves, the capital conservation buffer will be phased in between 2016 and 2019.

Source of Strength.   The Dodd-Frank Act extended the “source of strength” doctrine to savings and loan holding companies. The regulatory agencies must issue regulations requiring that all Association and savings and loan holding companies serve as a source of strength to their subsidiary depository institutions by providing capital, liquidity and other support in times of financial stress.

Dividends.   Sunnyside Federal is required to notify the Federal Reserve Board thirty days before declaring any dividend to Sunnyside Bancorp. The financial impact of a holding company on its subsidiary institution is a matter that is evaluated by the regulator and the agency has authority to order cessation of activities or divestiture of subsidiaries deemed to pose a threat to the safety and soundness of the institution.

Acquisition.   Under the Federal Change in Bank Control Act, a notice must be submitted to the Federal Reserve Board if any person (including a company), or group acting in concert, seeks to acquire direct or indirect “control” of a savings and loan holding company. Under certain circumstances, a change of control may occur, and prior notice is required, upon the acquisition of 10% or more of the company’s outstanding voting stock, unless the Federal Reserve Board has found that the acquisition will not result in control of the company. A change in control definitively occurs upon the acquisition of 25% or more of the

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company’s outstanding voting stock. Under the Change in Bank Control Act, the Federal Reserve Board generally has 60 days from the filing of a complete notice to act, taking into consideration certain factors, including the financial and managerial resources of the acquirer and the competitive effects of the acquisition.

Federal Securities Laws

Sunnyside Bancorp’s common stock is registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. Sunnyside Bancorp is subject to the information, proxy solicitation, insider trading restrictions and other requirements under the Securities Exchange Act of 1934.

Emerging Growth Company Status

The Jumpstart Our Business Startups Act (the “JOBS Act”), which was enacted in April 2012, has made numerous changes to the federal securities laws to facilitate access to capital markets. Under the JOBS Act, a company with total annual gross revenues of less than $1.0 billion during its most recently completed fiscal year qualifies as an “emerging growth company.” Sunnyside Bancorp qualifies as an emerging growth company under the JOBS Act.

An “emerging growth company” may choose not to hold stockholder votes to approve annual executive compensation (more frequently referred to as “say-on-pay” votes) or executive compensation payable in connection with a merger (more frequently referred to as “say-on-golden parachute” votes). An emerging growth company also is not subject to the requirement that its auditors attest to the effectiveness of the company’s internal control over financial reporting, and can provide scaled disclosure regarding executive compensation; however, Sunnyside Bancorp will also not be subject to the auditor attestation requirement or additional executive compensation disclosure so long as it remains a “smaller reporting company” under Securities and Exchange Commission regulations (generally less than $75 million of voting and non-voting equity held by non-affiliates). Finally, an emerging growth company may elect to comply with new or amended accounting pronouncements in the same manner as a private company, but must make such election when the company is first required to file a registration statement. Such an election is irrevocable during the period a company is an emerging growth company. Sunnyside Bancorp has elected to comply with new or amended accounting pronouncements in the same manner as a private company.

A company loses emerging growth company status on the earlier of: (i) the last day of the fiscal year of the company during which it had total annual gross revenues of  $1.0 billion or more; (ii) the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the company pursuant to an effective registration statement under the Securities Act of 1933; (iii) the date on which such company has, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (iv) the date on which such company is deemed to be a “large accelerated filer” under Securities and Exchange Commission regulations (generally, at least $700 million of voting and non-voting equity held by non-affiliates).

26

TAXATION

Federal Taxation

General.   Sunnyside Bancorp and Sunnyside Federal are subject to federal income taxation in the same general manner as other corporations, with some exceptions discussed below. The following discussion of federal taxation is intended only to summarize material federal income tax matters and is not a comprehensive description of the tax rules applicable to Sunnyside Bancorp and Sunnyside Federal.

Method of Accounting.   For federal income tax purposes, Sunnyside Federal currently reports its income and expenses on the accrual method of accounting and uses a tax year ending December 31st for filing its federal income tax returns. The Small Business Protection Act of 1996 eliminated the use of the reserve method of accounting for bad debt reserves by savings institutions, effective for taxable years beginning after 1995.

Minimum Tax.   The Internal Revenue Code of 1986, as amended, imposes an alternative minimum tax at a rate of 20% on a base of regular taxable income plus certain tax preferences, less an exemption amount, referred to as “alternative minimum taxable income.” The alternative minimum tax is payable to the extent tax computed this way exceeds tax computed by applying the regular tax rates to regular taxable income. Net operating losses can, in general, offset no more than 90% of alternative minimum taxable income. Certain payments of alternative minimum tax may be used as credits against regular tax liabilities in future years. At December 31, 2014, we had no minimum tax credit carryforward.

Net Operating Loss Carryovers.   Generally, a financial institution may carry back net operating losses to the preceding two taxable years and forward to the succeeding 20 taxable years. However, as a result of recent legislation, subject to certain limitations, the carryback period for net operating losses incurred in 2008 or 2009 (but not both years) has been expanded to five years. At December 31, 2014, Sunnyside Federal had $1,252,000 of federal net operating loss carry-forwards and $1,224,000 of New York State net operating loss carry-forwards available for future use.

Capital Loss Carryovers.   Generally, a financial institution may carry back capital losses to the preceding three taxable years and forward to the succeeding five taxable years. Any capital loss carryback or carryover is treated as a short-term capital loss for the year to which it is carried. As such, it is grouped with any other capital losses for the year to which carried and is used to offset any capital gains. Any undeducted loss remaining after the five year carryover period is not deductible. At December 31, 2014, Sunnyside Federal had a capital loss carryover of  $719,639, which will expire during the year ending December 31, 2015. This capital loss carryover was fully reserved for as of December 31, 2014.

Corporate Dividends.   We may generally exclude from our income 100% of dividends received from Sunnyside Federal as a member of the same affiliated group of corporations.

Audit of Tax Returns.   Sunnyside Federal’s federal income tax returns have been audited for the years ended December 31, 2011 and 2012. Audit results concluded that no changes were proposed to the filed returns for each of the two years noted.

New York State Taxation

Sunnyside Bancorp and Sunnyside Federal report their combined income on a calendar year basis to New York State. New York State franchise tax on corporations is imposed in an amount equal to the greater of: (i) 7.1% of  “entire net income” allocable to New York State; (ii) 3% of  “alternative entire net income” allocable to New York State; (iii) 0.01% of the average value of assets allocable to New York State; or (iv) nominal minimum tax. Entire net income is based on federal taxable income, subject to certain modifications. Alternative entire net income is equal to entire net income without certain modifications.

In addition, the companies are subject to a Metropolitan Transportation Business Tax surcharge equal to 17% of New York franchise tax, as calculated with certain adjustments.

Sunnyside Federal’s state income tax returns have not been audited in the most recent five-year period.

27

Availability of Annual Report on Form 10-K

This Annual Report on Form 10-K is available by written request to: Sunnyside Bancorp Inc, 56 Main Street, Irvington, New York 10533, Attention: Corporate Secretary.

ITEM 1A.

Risk Factors

The presentation of Risk Factors is not required for smaller reporting companies such as Sunnyside Bancorp.

ITEM 1B.

Unresolved Staff Comments

None.

ITEM 2.

Properties

We operate from our office located at 56 Main Street, Irvington, New York 10533. The aggregate net book value of our premises was $1.4 million at December 31, 2014.

ITEM 3.

Legal Proceedings

At December 31, 2014, we were not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business which, in the aggregate, involve amounts which management believes will not materially adversely affect our financial condition, our results of operations and our cash flows.

ITEM 4.

Mine Safety Disclosures

Not applicable.

28

PART II

ITEM 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

(a) Market Information, Holders and Dividend Information.    Our common stock is quoted on the OTC Bulletin Board under the symbol “SNNY.” The approximate number of holders of record of Sunnyside Bancorp common stock as of December 31, 2014 was 100. Certain shares of Sunnyside Bancorp are held in “nominee” or “street” name and accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number.

The following table presents quarterly market information for Sunnyside Bancorp, Inc.’s common stock for the years ended December 31, 2014 and 2013.

​	High Sale			Low Sale
2014	​			​
Quarter ended December 31	​	$	10.00	​	$	9.80
Quarter ended September 30	​	$	10.06	​	$	9.30
Quarter ended June 30	​	$	9.75	​	$	9.35
Quarter ended March 31	​	$	9.75	​	$	9.18
2013	​			​
Quarter ended December 31	​	$	10.14	​	$	9.41
Quarter ended September 30(1)	​	$	10.74	​	$	9.75

(1)

Sunnyside Bancorp’s stock began trading on July 16, 2013.

Sunnyside Bancorp does not currently pay cash dividends on its common stock. Dividend payments by Sunnyside Bancorp are dependent on dividends it receives from Sunnyside Federal, because Sunnyside Bancorp has no source of income other than dividends from Sunnyside Federal, earnings from the investment of proceeds from the sale of shares of common stock retained by Sunnyside Bancorp and interest payments with respect to Sunnyside Bancorp’s loan to the Employee Stock Ownership Plan. See “Item 1. Business — Supervision and Regulation — Federal Banking Regulation — Capital Distributions.”

(b) Sales of Unregistered Securities.   Not applicable.

(c) Use of Proceeds.   Not applicable.

(d) Securities Authorized for Issuance Under Equity Compensation Plans.    The following table sets forth the information as of December 31, 2014 with respect to compensation plans (other than our employee stock ownership plan) under which equity securities of the registrant are authorized for issuance.

​	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted average exercise prices of outstanding options, warrants and rights(1)		Number of common stock remaining available for future issuance under stock based compensation plans (excluding securities reflected in first column)
Equity compensation plans approved by stockholders	​	103,155	​	N/A	​	103,155
Equity compensation plans not approved by stockholders	​	N/A	​	N/A	​	N/A
Total	​	103,155	​	N/A	​	103,155

(1)

Reflects exercise price of options only.

29

(e) Stock Repurchases.   Not applicable.

(f) Stock Performance Graph.   Not required for smaller reporting companies.

ITEM 6.

Selected Financial Data

Not required for smaller reporting companies.

ITEM 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

This section is intended to help a reader understand the financial performance of Sunnyside Bancorp and its subsidiaries through a discussion of the factors affecting our financial condition at December 31, 2014 and December 31, 2013 and our results of operations for the years ended December 31, 2014 and 2013. This section should be read in conjunction with the consolidated financial statements and notes to the consolidated financial statements that appear elsewhere in this Annual Report on Form 10-K.

Overview

Sunnyside Federal is a federal savings association that was founded in 1930. Sunnyside Federal conducts business from its full-service banking office located in Irvington, New York which is located in Westchester County, New York approximately 25 miles north of New York City. We consider our deposit market area to be the Westchester County, New York towns of Irvington, Tarrytown, Sleepy Hollow, Hastings, Dobbs Ferry and Ardley-on-Hudson, and consider our lending area to be Westchester, Putnam and Rockland Counties, New York.

Our business consists primarily of taking deposits from the general public and investing those deposits, together with funds generated from operations, in one- to four-family residential real estate loans and commercial and multi-family real estate loans, and, to a much more limited extent, commercial, home equity lines of credit and other loans (consisting primarily of loans secured by deposits and marketable securities). At December 31, 2014, $31.5 million or 72.3% of our total loan portfolio was comprised of owner-occupied, one-to four family residential real estate loans and $9.4 million or 21.6% was comprised of commercial and multi-family real estate loans.

As a result of our strict, quality-oriented underwriting and credit monitoring processes, we had $432,000 in non-performing assets at December 31, 2014 and $369,000 at December 31, 2013. There were $297,000 of delinquent loans at December 31, 2014 compared to $705,000 of delinquent loans at December 31, 2013.

We also invest in securities, which consist primarily of U.S. government agency obligations and mortgage-backed securities and to a lesser extent, securities of states, counties and political subdivisions.

We offer a variety of deposit accounts, including certificate of deposit accounts, money market accounts, savings accounts, NOW accounts and individual retirement accounts. We historically have limited our use of borrowings to fund our operations and had no borrowings at December 31, 2014.

A majority of the members of our current executive management team joined Sunnyside Federal since 2010. Since that time, we have begun to shift Sunnyside Federal’s strategy to diversify our traditional thrift focus into a more commercial bank style of operation with a broadened base of financial products and services while emphasizing superior customer service. While residential real estate lending has been, and will remain, the most important part of our operations, we intend to diversify our focus on non-residential lending, including commercial and multi-family real estate lending and commercial lending, including Small Business Administration (SBA) lending.

Critical Accounting Policies

The discussion and analysis of the financial condition and results of operations are based on our financial statements, which are prepared in conformity with generally accepted accounting principles used in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of income and expenses. We consider the accounting policies discussed below to be critical accounting policies. The estimates and assumptions that

30

we use are based on historical experience and various other factors and are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions, resulting in a change that could have a material impact on the carrying value of our assets and liabilities and our results of operations.

On April 5, 2012, the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies. As an “emerging growth company” we may delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. We intend to take advantage of the benefits of this extended transition period. Accordingly, our financial statements may not be comparable to companies that comply with such new or revised accounting standards.

The following represent our critical accounting policies:

Allowance for Loan Losses.   The allowance for loan losses is the estimated amount considered necessary to cover inherent, but unconfirmed, credit losses in the loan portfolio at the balance sheet date. The allowance is established through the provision for losses on loans which is charged against income. In determining the allowance for loan losses, management makes significant estimates and has identified this policy as one of our most critical accounting policies.

Management performs a quarterly evaluation of the allowance for loan losses. Consideration is given to a variety of factors in establishing this estimate including, but not limited to, current economic conditions, delinquency statistics, geographic and industry concentrations, the adequacy of the underlying collateral, the financial strength of the borrower, results of internal loan reviews and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant change.

The analysis has two components, specific and general allocations. Specific percentage allocations can be made for unconfirmed losses related to loans that are determined to be impaired. Impairment is measured by determining the present value of expected future cash flows or, for collateral-dependent loans, the fair value of the collateral adjusted for market conditions and selling expenses. If the fair value of the loan is less than the loan’s carrying value, a charge is recorded for the difference. The general allocation is determined by segregating the remaining loans by type of loan, risk weighting (if applicable) and payment history. We also analyze historical loss experience, delinquency trends, general economic conditions and geographic and industry concentrations. This analysis establishes factors that are applied to the loan groups to determine the amount of the general reserve. Actual loan losses may be significantly more than the allowances we have established which could result in a material negative effect on our financial results.

Securities Valuation and Impairment.   We classify our investments in debt and equity securities as either held-to-maturity or available-for-sale. Securities classified as held-to maturity are recorded at cost or amortized cost. Available-for-sale securities are carried at fair value. We obtain our fair values from a third party service. This service’s fair value calculations are based on quoted market prices when such prices are available. If quoted market prices are not available, estimates of fair value are computed using a variety of techniques, including extrapolation from the quoted prices of similar instruments or recent trades for thinly traded securities, fundamental analysis, or through obtaining purchase quotes. Due to the subjective nature of the valuation process, it is possible that the actual fair values of these investments could differ from the estimated amounts, thereby affecting our financial position, results of operations and cash flows. If the estimated value of investments is less than the cost or amortized cost, we evaluate whether an event or change in circumstances has occurred that may have a significant adverse effect on the fair value of the investment. If such an event or change has occurred and we determine that the impairment is other-than-temporary, we expense the impairment of the investment in the period in which the event or change occurred. We also consider how long a security has been in a loss position in determining if it is other than temporarily impaired. Management also assesses the nature of the unrealized losses taking into consideration factors such as changes in risk-free interest rates, general credit spread widening, market supply and demand, creditworthiness of the issuer, and quality of the underlying collateral. At December 31, 2014, 93.1% of our securities were issued by U.S. government agencies or U.S. government-sponsored enterprises.

31

Comparison of Financial Condition at December 31, 2014 and December 31, 2013

Total assets increased $1.9 million, or 2.1%, to $93.2 million at December 31, 2014 from $91.3 million at December 31, 2013. The increase was primarily the result of higher loan and cash balances partly offset by decreases in investment securities.

Securities available for sale decreased $3.7 million, or 9.8%, to $34.5 million at December 31, 2014 from $38.2 million at December 31, 2013 which was partly offset by an increase of  $1.5 million or 31.9% of securities held to maturity. The decrease in securities available for sale during 2014 was a result of funding loan growth as well as an increase in our state, county and municipal investments in the held to maturity portfolio.

Net loans receivable increased $3.2 million, or 7.9%, to $43.2 million at December 31, 2014 from $40.0 million at December 31, 2013. The increase in loans receivable during this period was due to an increase of $3.9 million or 70.0% in commercial and multi-family real estate loans, which offset declines in one- to four-family residential real estate loans, home equity lines of credit and loans secured by savings accounts. The Bank also began offering private student loan financing, and originated $127,000 of these loans in 2014. These loans are guaranteed by a third- party insurance company in the event of default.

Cash and cash equivalents increased $1.1 million, or 41.1%, to $3.7 million at December 31, 2014 from $2.6 million at December 31, 2013. The increase was due to pay-downs and sales in the available for sale investment portfolio and increased deposit balances partly offset by increases in the held to maturity investment portfolio and increases in loan balances. Principal payments and sales reduced the securities available for sale portfolio by $3.7 million or 9.8% and these reductions were deployed into growth in the loan portfolio and held to maturity investment portfolio.

At December 31, 2014, our investment in bank-owned life insurance was $2.1 million, an increase of $65,000, from $2.0 million at December 31, 2013. We invest in bank-owned life insurance to provide us with a funding offset for our benefit plan obligations. Bank-owned life insurance also generally provides us noninterest income that is non-taxable. Federal regulations generally limit our investment in bank-owned life insurance to 25% of our Tier 1 capital plus our allowance for loan losses, and we have not made any additional contributions to our bank-owned life insurance since 2002.

Deferred income taxes decreased $118,000, or 11.2%, to $929,000 at December 31, 2014 from $1.0 million at December 31, 2013. The decrease resulted from a lower unrealized loss on available for sale securities partly offset by increases in net operating loss carryovers and higher unfunded pension liabilities.

Other assets, consisting primarily of prepaid insurance premiums, prepaid expenses and an annuity contract for a former director, decreased $69,000, or 13.4%, to $450,000 at December 31, 2014 from $519,000 at December 31, 2013 primarily due to a reduction in prepaid assets.

Total deposits increased $1.5 million, or 2.0%, to $79.6 million at December 31, 2014 from $78.0 million at December 31, 2013. The increase was primarily due to increases in checking balances partly offset by a decrease in certificates of deposit. Non-interest bearing checking increased $1.2 million or 32.5% and NOW accounts increased $1.2 million or 12.0%. As part of our efforts to reduce reliance on higher costing certificates of deposit as well as for funding needs, we accepted $4 million in brokered certificates for two years at a rate of 65 basis points and allowed higher rate certificates to run-off totaling $4.9 million.

We had no borrowings outstanding at December 31, 2014 or 2013. At December 31, 2014, we had the ability to borrow approximately $27.9 million from the Federal Home Loan Bank of New York, subject to our pledging sufficient assets. Additionally, at December 31, 2014, we had the ability to borrow up to $2.0 million on a Fed Funds line of credit with Atlantic Community Bankers Bank.

Total equity increased $262,000 or 2.2% to $12.2 million at December 31, 2014 compared to $11.9 million at December 31, 2013 primarily due to lower unrealized losses in our investment portfolio partly offset by our net loss for 2014.

32

Comparison of Operating Results for the Years Ended December 31, 2014 and 2013

General.   We had a net loss of  $210,000 during 2014 as compared to net loss of  $60,000 for 2013. The increase in our net loss resulted primarily from higher non-interest expense and a decrease in non-interest income partly offset by an increase in net interest income and a higher income tax benefit.

Our current business strategy includes increasing the Bank’s asset size, diversifying our loan portfolio to increase our non-residential lending, including commercial and multi-family real estate lending and commercial lending and increasing our non-interest income, as ways to improve our profitability in future periods.

Our ability to achieve profitability depends upon a number of factors, including general economic conditions, competition with other financial institutions, changes to the interest rate environment that may reduce our profit margins or impair our business strategy, adverse changes in the securities markets, changes in laws or government regulations, changes in consumer spending, borrowing, or saving, and changes in accounting policies. If we fail to generate additional revenue or reduce our expenses, we may continue to incur losses in 2015 and in future years and we may never generate net income. Over time, continued net losses and negative cash flow could drain our capital and endanger the safety and soundness of the Bank.

Net Interest Income.   Net interest income increased $185,000 or 8.7%, to $2.3 million for the year ended December 31, 2014 from $2.1 million for the year ended December 31, 2013. The increase in net interest income was primarily due to a $177,000 or 30.8% decrease in interest expense. The decrease in interest expense was primarily driven by management’s decision to reduce the Bank’s reliance on higher costing certificates of deposit and allowing higher rate certificates of deposit totaling $4.9 million to run-off. This run-off was partly replaced with lower cost brokered two year deposits totaling $4.0 million at a rate of 65 basis points.

Interest income on loans decreased $85,000 or 4.4% primarily due to a declining interest rate environment. This decrease was offset by higher investment income of  $88,000 or 11.7% mainly due to higher portfolio returns. The average yield on our loans decreased 25 basis points, and the average yield on our mortgage-backed securities and investment securities increased 16 basis points and 94 basis points, respectively, during 2014. Our net interest rate spread increased 21 basis points to 2.67% for the year ended December 31, 2014 from 2.46% for the year ended December 31, 2013, and our net interest margin increased 22 basis points to 2.74% for 2014 from 2.52% for 2013.

Interest and Dividend Income.   Interest and dividend income increased $8,000 to $2.7 million for the year ended December 31, 2014 from $2.7 million for the year ended December 31, 2013. The increase resulted primarily from an $88,000 or 11.7% increase in interest income on investment and mortgage-backed securities and a $5,000 increase in federal funds sold and other earning assets partly offset by a decrease of  $85,000 or 4.4% in interest income on loans.

Interest income on loans decreased $85,000, or 4.4%, to $1.8 million for the year ended December 31, 2014 from $1.9 million for the year ended December 31, 2013. The decrease resulted primarily from a decrease in the average yield of loans to 4.54% in 2014 from 4.79% for 2013. The decrease of 25 basis points was partially offset by an increase in average loan volume of  $379,000 in 2014 to $40.7 million from $40.4 million in 2013.

Interest and dividend income on investment securities increased $49,000 to $170,000 for the year ended December 31, 2014 from $121,000 for the year ended December 31, 2013 primarily due to an increase in the average yield of 94 basis points from 1.67% in 2013 to 2.61% in 2014 partly offset by a $717,000 decrease in average balances to $6.5 million for 2014 from $7.2 million for 2013. Interest on mortgage-backed securities increased $39,000 to $671,000 for 2014 from $632,000 for 2013 primarily due to an increase of 16 basis points in the average yield on these securities from 1.77% in 2013 to 1.93% in 2014 partly offset by a $919,000 decrease in the average balance of mortgage-backed securities to $34.8 million during 2014 from $35.7 million during 2013.

Interest Expense.   Interest expense, consisting of the cost of interest-bearing deposits and borrowings, decreased $177,000, or 30.8%, to $397,000 for the year ended December 31, 2014 from $574,000 for the year ended December 31, 2013. The decrease in the cost of interest-bearing deposits was due to a decrease of 20 basis points in the average rate paid on these funds to 0.54% for 2014 from 0.74% for 2013, reflecting lower

33

market interest rates. Also contributing to the decrease in interest expense was a decrease of  $3.8 million, or 4.9%, in the average balance of interest-bearing deposits to $74.0 million for the year ended December 31, 2014 from $77.9 million for the year ended December 31, 2013.

Provision for Loan Losses.   We establish provisions for loan losses that are charged to operations in order to maintain the allowance for loan losses at a level believed, to the best of management’s knowledge, to cover all known and inherent losses in the portfolio both probable and reasonable to estimate at each reporting date. We recorded a provision for loan losses of  $56,000 for the year ended December 31, 2014 compared to $25,000 for the year ended December 31, 2013. The increase was mainly due to an increase in the commercial real estate loan portfolio due to loan growth. The allowance for loan losses was $396,000 at December 31, 2014 compared to $340,000 at December 31, 2013. We had $432,000 in non-performing loans at December 31, 2014 and $369,000 at December 31, 2013. During the years ended December 31, 2014 and 2013 we had no loan charge-offs and had a $1,000 recovery in 2013.

Noninterest Income.   Noninterest income decreased $152,000 or 46.4% to $175,000 for the year ended December 31, 2014 from $327,000 for the year ended December 31, 2013. The decrease was primarily due to a $146,000 decrease in gains on the sale of securities.

Noninterest Expense.   Noninterest expense increased $239,000, or 9.3%, to $2.8 million for the year ended December 31, 2014 from $2.6 million for the year ended December 31, 2013. Compensation and benefits increased $35,000 to $1.3 million for 2014 from $1.3 million for 2013, resulting from normal salary and related benefit increases. Occupancy and equipment increased $13,000 or 3.5%, to $400,000 for 2014 from $386,000 for 2013 as a result of normal increases in taxes, utilities, maintenance, repairs and depreciation costs. Data processing fees increased $39,000 or 23.3% primarily due to higher costs related to the Bank’s core processing as well as additional costs to support new products and services. Professional fees increased $133,000, or 39.4%, to $471,000 for 2014 from $338,000 in 2013. The increase was due to higher consulting fees, legal fees and accounting fees due to the costs of compliance and being a newly formed public company as well as professional fees incurred to fill the interim CFO position during the second quarter of 2014. Advertising and promotion expense increased $26,000 or 33.8% due to initiatives the Company is undertaking to acquire customer relationships and to improve its product set.

Income Tax Expense.   We recorded an income tax benefit of  $178,000 for the year ended December 31, 2014 based on a loss before taxes of  $388,000 compared to a tax benefit of  $91,000 in 2013 based on a loss before taxes of  $151,000. The income tax benefit is calculated based on our pre-tax loss adjusted for permanent book to tax differences, such as non-taxable interest income on municipal securities and income on bank owned life insurance.

34

Analysis of Net Interest Income

The following table sets forth average balance sheets, average yields and costs, and certain other information for the periods indicated. All average balances are daily average balances. We had no non-accrual loans during the periods presented. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense. No taxable equivalent adjustments have been made.

​

For the Years Ended December 31,

​

2014

2013

​

Average Balance

Interest Income/​ Expense

Yield/​ Cost

Average Balance

Interest Income/​ Expense

Yield/​ Cost

​

(Dollars in thousands)

Interest-earning assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans

​

$

40,734

​

$

1,848

​

4.54%

​

$

40,355

​

$

1,932

​

4.79%

Investment securities

​

​

6,508

​

​

170

​

2.61%

​

​

7,225

​

​

121

​

1.67%

Mortgage-backed securities

​

​

34,786

​

​

671

​

1.93%

​

​

35,705

​

​

632

​

1.77%

Fed funds sold and other interest-earning assets

​

​

2,112

​

​

10

​

0.47%

​

​

773

​

​

6

​

0.78%

Total interest-earning assets

​

​

84,140

​

​

2,699

​

3.21%

​

​

84,058

​

​

2,691

​

3.21%

Non-interest-earning assets

​

​

8,051

​

​

​

​

​

​

​

8,506

​

​

​

​

​

Total assets

​

$

92,191

​

​

​

​

​

​

$

92,564

​

​

​

​

​

Interest-bearing liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Transaction accounts

​

$

10,345

​

​

6

​

0.06%

​

$

10,083

​

​

5

​

0.05%

Regular savings

​

​

28,192

​

​

32

​

0.11%

​

​

29,303

​

​

34

​

0.12%

Money market

​

​

3,471

​

​

3

​

0.09%

​

​

3,415

​

​

3

​

0.09%

Certificates of deposit

​

​

32,036

​

​

356

​

1.11%

​

​

35,066

​

​

532

​

1.52%

Other borrowings

​

​

88

​

​

0

​

0.40%

​

​

—

​

​

—

​

—

Total interest-bearing liabilities

​

​

74,132

​

​

397

​

0.54%

​

​

77,867

​

​

574

​

0.74%

Noninterest-bearing liabilities

​

​

5,896

​

​

​

​

​

​

​

6,085

​

​

​

​

​

Total liabilities

​

​

80,028

​

​

​

​

​

​

​

83,952

​

​

​

​

​

Equity

​

​

12,163

​

​

​

​

​

​

​

8,612

​

​

​

​

​

Total liabilities and equity

​

$

92,191

​

​

​

​

​

​

$

92,564

​

​

​

​

​

Net interest income

​

​

​

​

$

2,302

​

​

​

​

​

​

$

2,117

​

​

Interest rate spread(1)

​

​

​

​

​

​

​

2.67%

​

​

​

​

​

​

​

2.46%

Net interest-earning assets(2)

​

$

10,096

​

​

​

​

​

​

$

6,191

​

​

​

​

​

Net interest margin(3)

​

​

​

​

​

2.74%

​

​

​

​

​

​

​

2.52%

​

​

Average interest-earning assets to average interest-bearing liabilities

​

​

113.64%

​

​

​

​

​

​

​

107.95%

​

​

​

​

​

(1)

Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.

(2)

Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.

(3)

Net interest margin represents net interest income divided by average total interest-earning assets.

35

Rate/Volume Analysis

The following table presents the effects of changing rates and volumes on our net interest income for the fiscal years indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately, based on the changes due to rate and the changes due to volume.

​	For the Years Ended December 31, 2014 vs. 2013
​	Increase (Decrease) Due to						Total Increase (Decrease)
​	Volume			Rate
Interest-earning assets:	​	​	​	​	​	​	​	​	​
Loans	​	$	18	​	$	(102)	​	$	(84)
Investment securities	​	​	(13)	​	​	62	​	​	49
Mortgage-backed securities	​	​	(16)	​	​	55	​	​	39
Fed funds sold and other interest-earning assets	​	​	7	​	​	(3)	​	​	4
Total interest income	​	​	(4)	​	​	12	​	​	8
Interest-bearing liabilities:	​			​			​
NOW accounts	​	​	0	​	​	1	​	​	1
Regular savings	​	​	(1)	​	​	(1)	​	​	(2)
Money market	​	​	—	​	​	—	​	​	—
Certificates of deposit	​	​	(43)	​	​	(133)	​	​	(176)
Total interest expense	​	​	(44)	​	​	(133)	​	​	(177)
Increase (decrease) in net interest income	​	$	40	​	$	145	​	$	185

Management of Market Risk

General.   Our most significant form of market risk is interest rate risk because, as a financial institution, the majority of our assets and liabilities are sensitive to changes in interest rates. Therefore, a principal part of our operations is to manage interest rate risk and limit the exposure of our financial condition and results of operations to changes in market interest rates. Our Asset-Liability Committee is responsible for evaluating the interest rate risk inherent in our assets and liabilities, for determining the level of risk that is appropriate, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the policy and guidelines approved by our board of directors.

Historically, we have operated as a traditional thrift institution. A significant portion of our assets consist of longer-term, fixed-rate, one- to four-family residential real estate loans and securities, which we have funded primarily with deposits. Historically we have retained in our portfolio all of the one- to four-family residential real estate loans that we have originated. We have revised our business strategy with an increased emphasis on the origination of commercial and multi-family real estate loans and commercial loans. Such loans generally have shorter maturities than one- to four-family residential real estate loans. Additionally, subject to favorable market conditions, we will consider the sale or brokerage of certain newly originated longer-term (terms of 15 years or greater), one- to four-family residential real estate loans rather than retain all of such loans in portfolio as we have done in the past. Additionally, we intend to implement a Small Business Administration (“SBA”) lending program and consider selling the government-guaranteed portions of such loans to generate additional fee income and manage interest rate risk. We are an SBA-approved lender.

36

Net Interest Income Analysis.   We analyze our sensitivity to changes in interest rates through our net interest income simulation model which is provided to us by an independent third party. Net interest income is the difference between the interest income we earn on our interest-earning assets, such as loans and securities, and the interest we pay on our interest-bearing liabilities, such as deposits and borrowings. We estimate what our net interest income would be for a one-year period based on current interest rates. We then calculate what the net interest income would be for the same period under different interest rate assumptions. We also estimate the impact over a five year time horizon. The following table shows the estimated impact on net interest income for the one-year period beginning December 31, 2014 resulting from potential changes in interest rates. These estimates require certain assumptions to be made, including loan and mortgage-related investment prepayment speeds, reinvestment rates, and deposit maturities and decay rates. These assumptions are inherently uncertain. As a result, no simulation model can precisely predict the impact of changes in interest rates on our net interest income. Although the net interest income table below provides an indication of our interest rate risk exposure at a particular point in time, such estimates are not intended to, and do not, provide a precise forecast of the effect of changes in market interest rates on our net interest income and will differ from actual results.

Rate Shift(1)	Net Interest Income Year 1 Forecast			Year 1 Change from Level
​	(In thousands)			​	​
+400	​	$	2,041	​	(14.33)%
+300	​	$	2,187	​	(8.18)%
+200	​	$	2,299	​	(3.48)%
+100	​	$	2,372	​	(0.44)%
Level	​	$	2,382	​	—
-100	​	$	2,275	​	(4.50)%

(1)

The calculated changes assume an immediate shock of the static yield curve.

Certain shortcomings are inherent in the methodology used in the above interest rate risk measurement. Modeling changes in net portfolio value requires making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. In this regard, the tables presented assume that the composition of our interest-sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration or repricing of specific assets and liabilities. The tables also do not measure the changes in credit and liquidity risk that may occur as a result of changes in general interest rates. Accordingly, although the tables provide an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our economic value of equity and will differ from actual results.

We do not engage in hedging activities, such as engaging in futures, options or swap transactions, or investing in high-risk mortgage derivatives, such as collateralized mortgage obligation residual interests, real estate mortgage investment conduit residual interests or stripped mortgage backed securities.

Liquidity and Capital Resources

Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, scheduled amortization and prepayments of loan principal and mortgage-backed securities, maturities and calls of investment securities and funds provided by our operations. In addition, we have the ability to borrow from the Federal Home Loan Bank of New York. At December 31, 2014, we had the capacity to borrow approximately $27.0 million from the Federal Home Loan Bank of New York, subject to our pledging sufficient assets. Additionally, at December 31, 2014, we had the ability to borrow up to $2.0 million on a Fed Funds line of credit with Atlantic Community Bankers Bank. However, we have historically limited our use of Federal Home Loan Bank advances or any other borrowings to fund our

37

operations, and at December 31, 2014 and 2013, we had no outstanding advances from the Federal Home Loan Bank of New York or any other borrowings.

Loan repayments and maturing securities are a relatively predictable source of funds. However, deposit flows, calls of securities and prepayments of loans and mortgage-backed securities are strongly influenced by interest rates, general and local economic conditions and competition in the marketplace. These factors reduce the predictability of these sources of funds.

Our primary investing activities are the origination of one- to four-family real estate loans and commercial and multi-family real estate loans and the purchase of securities. For the year ended December 31, 2014, loan originations totaled $10.7 million, compared to originations of  $6.4 million for the year ended December 31, 2013. For the year ended December 31, 2013, we purchased residential mortgage loans totaling $2.2 million. Purchases of investment and mortgage-backed securities totaled $5.6 million for the year ended December 31, 2014 and $22.8 million for the year ended December 31, 2013.

Total deposits increased $1.5 million during the year ended December 31, 2014, while total deposits decreased $8.2 million during the year ended December 31, 2013. Deposit flows are affected by the level of interest rates, the interest rates and products offered by competitors and other factors. At December 31, 2014, certificates of deposit scheduled to mature within one year totaled $14.0 million. Our ability to retain these deposits will be determined in part by the interest rates we are willing to pay on such deposits.

We are committed to maintaining a strong liquidity position. We monitor our liquidity position on a daily basis. We anticipate that we will have sufficient funds to meet our current funding commitments. Based on our deposit retention experience and current pricing strategy, we anticipate that a significant portion of maturing time deposits will be retained.

At December 31, 2014 and 2013, we exceeded all of the applicable regulatory capital requirements. Our core (Tier 1) capital was $12.1 million and $12.2 million, or 12.81% and 13.25% of total assets, at December 31, 2014 and 2013, respectively. In order to be classified as “well-capitalized” under federal banking regulations, we were required to have core capital of at least $4.7 million, or 5.0% of assets, as of December 31, 2014. To be classified as a well-capitalized savings association, we must also have a ratio of total risk-based capital to risk-weighted assets of at least 10.0%, and a Tier 1 risk-based capital to risk-weighted assets of at least 6%. At December 31, 2014 and 2013, we had a total risk-based capital ratio of 31.5% and 36.2%, respectively, and Tier 1 risk-based capital ratios of 30.5% and 35.2%, respectively. Our regulatory capital ratios decreased slightly during 2014 mainly due to the net loss of  $210,000 recorded for 2014.

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

Commitments.   As a financial services provider, we routinely are a party to various financial instruments with off-balance-sheet risks, such as commitments to extend credit and unused lines of credit. While these contractual obligations represent our future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon. Such commitments are subject to the same credit policies and approval process accorded to loans we make.

Contractual Obligations.   In the ordinary course of our operations, we enter into certain contractual obligations. Such obligations include data processing services, operating leases for premises and equipment, agreements with respect to borrowed funds and deposit liabilities.

Recent Accounting Pronouncements

In January 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-04, “Receivables — Troubled Debt Restructurings by Creditors (Subtopic 310-40) Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure,” which applies to all creditors who obtain physical possession of residential real estate property collateralizing a consumer mortgage loan in satisfaction of a receivable. The amendments in this update clarify when an in substance repossession or foreclosure occurs and requires disclosure of both (1) the amount of foreclosed residential real estate property held by a creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments in ASU 2014-04 are effective for public business entities for fiscal

38

years, and interim periods within those fiscal years, beginning after December 15, 2014. Early adoption is permitted and entities can elect to adopt a modified retrospective transition method or a prospective transition method. The adoption of this guidance should not have a material impact on the Company’s financial condition or results of operations.

In June 2014, the FASB issued ASU 2014-12, “Compensation — Stock Compensation (Topic 718)”. The amendments in this ASU require a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The performance target should not be reflected in estimating the grant-date fair value of the award, and compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The amendments in this ASU are effective for annual periods beginning after December 15, 2015. The adoption of this guidance should not have a material impact on the Company’s financial condition or results of operations.

In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” This update is intended to provide guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Management is required under the new guidance to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued when preparing financial statements for each interim and annual reporting period. If conditions or events are identified, the ASU specifies the process that must be followed by management and also clarifies the timing and content of going concern footnote disclosures in order to reduce diversity in practice. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2016. Early adoption is permitted. The adoption of this guidance should not have a material impact on the Company’s financial condition or results of operations.

In January 2015, the FASB issued ASU 2015-01, “Income Statement — Extraordinary and Unusual Items (Subtopic 225-20)”. This ASU eliminates extraordinary items from US GAAP and will align more closely with International Accounting Standards 1, “Presentation of Financial Statements”. The amendments in this ASU are effective beginning after December 15, 2015. The adoption of this guidance should not have a material impact on the Company’s financial condition or results of operations.

In February 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810)”. This ASU focuses on the consolidation evaluation for reporting organizations that are required to evaluate consolidation of certain legal entities by reducing the number of consolidation models from four to two and is intended to improve current GAAP. The amendments in this ASU are effective beginning after December 15, 2016. The adoption of this guidance should not have a material impact on the Company’s financial condition or results of operations.

Impact of Inflation and Changing Price

Our financial statements and related notes have been prepared in accordance with U.S. GAAP. U.S. GAAP generally requires the measurement of financial position and operating results in terms of historical dollars without consideration of changes in the relative purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of our operations. Unlike industrial companies, our assets and liabilities are primarily monetary in nature. As a result, changes in market interest rates have a greater impact on performance than the effects of inflation.

ITEM 7A.

Quantitative and Qualitative Disclosures about Market Risk

Not required for smaller reporting companies.

ITEM 8.

Financial Statements and Supplementary Data

The consolidated audited financial statements for Sunnyside Bancorp are a part of this Annual Report on Form 10-K and may be found beginning on page F-1.

39

ITEM 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None

ITEM 9A.

Controls and Procedures

(a) An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation 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 December 31, 2014. Based on that evaluation, the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective.

During the quarter ended December 31, 2014, there have been no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

(b) Management’s annual report on internal control over financial reporting.

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting.

The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management, including the principal executive officer and principal financial officer, assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2014, based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in “Internal Control-Integrated Framework (1992).” Based on such assessment, management believes that the Company’s internal control over financial reporting as of December 31, 2014 is effective.

ITEM 9B.

Other Information

None.

40

PART III

ITEM 10.

Directors, Executive Officers and Corporate Governance

Information called for by this item concerning the identification, business experience and qualifications of Sunnyside’s directors will be included in Sunnyside’s definitive Proxy Statement to be filed with the Securities and Exchange Commission in connection with the annual meeting of shareholders to be held on June 16, 2015 (the “Proxy Statement”), under the heading “Proposal 1 — Election of Directors,” and is incorporated herein by reference. Information called for by this item concerning Sunnyside’s compliance with section 16(a) of the Exchange Act will be included in the Proxy Statement under the heading “Section 16(a) Beneficial Ownership Reporting Compliance,” and is incorporated herein by reference.

The Company has adopted a Code of Ethics (“Code”) that applies to the Company’s principal executive officer, principal financial officer and all other employees and directors. The Code includes guidelines relating to compliance with laws, the ethical handling of actual or potential conflicts of interest, the use of corporate opportunities, protection and use of the Company’s confidential information, accepting gifts and business courtesies, accurate financial and regulatory reporting, and procedures for promoting compliance with, and reporting violations of, the Code. Persons interested in obtaining a copy of the Code of Ethics may do so by writing to the Company at: Sunnyside Bancorp, Inc., 56 Main Street, Irvington, New York 10533, Attention Corporate Secretary.

ITEM 11.

Executive Compensation

The information required by this Item 11 is incorporated herein by reference to the section entitled “Executive Compensation” in the Company’s Proxy Statement.

ITEM 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this Item 12 is incorporated herein by reference to the section entitled “Principal Beneficial Owners of the Company’s Common Stock” in the Company’s Proxy Statement.

ITEM 13.

Certain Relationships and Related Transactions, and Director Independence

The information required by this Item 13 related to certain relationships and related transactions is incorporated herein by reference to the section entitled “Certain Relationships and Related Transactions” in the Company’s Proxy Statement. The information required under this Item 13 related to Director Independence is incorporated herein by reference to the section entitled “Corporate Governance” in the Company’s Proxy Statement.

ITEM 14.

Principal Accounting Fees and Services

The information required by this Item 14 is incorporated herein by reference to the section entitled “Fees Paid to Independent Registered Public Accounting Firm” in the Company’s Proxy Statement.

41

PART IV

ITEM 15.

Exhibits and Financial Statement Schedules

(a)(1)   Financial Statements

The documents filed as a part of this Form 10-K are:

(A)

Report of Independent Registered Public Accounting Firm;

(B)

Consolidated Statements of Financial Condition at December 31, 2014 and 2013;

(C)

Consolidated Statements of Operations for the years ended December 31, 2014 and 2013;

(D)

Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2014 and 2013;

(E)

Consolidated Statements of Changes in Equity for the Years Ended December 31, 2014 and 2013;

(F)

Consolidated Statements of Cash Flows for the years ended December 31, 2014 and 2013; and

(G)

Notes to Consolidated Financial Statements.

(a)(2)   Financial Statement Schedules

All financial statement schedules have been omitted as the required information is inapplicable or has been included in the Notes to Consolidated Financial Statements.

(a)(3)   Exhibits

3.1

Articles of Incorporation of Sunnyside Bancorp*

3.2

Bylaws of Sunnyside Bancorp*

4

Form of Common Stock Certificate of Sunnyside Bancorp*

10.1

Form of Employment Agreement with Timothy D. Sullivan*

10.2

Form of Employment Agreement with Gerardina Mirtuono*

10.3

Form of Employee Stock Ownership Plan*

21

Subsidiaries.

31.1

Certification required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32

Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101

The following financial statements for the year ended December 31, 2014, formatted in XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income and Comprehensive Income, (iii) Consolidated Statements of Stockholders’ Equity, (iv) Consolidated Statements of Cash Flows, and (v) the Notes to Consolidated Financial Statements.

*

Incorporated by reference to the Registration Statement on Form S-1 (file no. 333-187317), initially filed March 15, 2013.

42

INDEX TO FINANCIAL STATEMENTS OF
SUNNYSIDE BANCORP

Report of Independent Registered Public Accounting Firm	F-2
Consolidated Statements of Financial Condition at December 31, 2014 and 2013	F-3
Consolidated Statements of Operations for the years ended December 31, 2014 and 2013	F-4
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2014 and 2013	F-5
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2014 and 2013	F-6
Consolidated Statements of Cash Flows for the years ended December 31, 2014 and 2013	F-7
Notes to Consolidated Financial Statements	F-8

See accompanying notes to consolidated financial statements.

F-1

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
Sunnyside Bancorp, Inc. and Subsidiary
Irvington, New York

We have audited the accompanying consolidated statements of financial condition of Sunnyside Bancorp, Inc. and Subsidiary (the “Company”), as of December 31, 2014 and 2013, and the related consolidated statements of operations, comprehensive income (loss), stockholders equity, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Sunnyside Bancorp, Inc. and Subsidiary, as of December 31, 2014 and 2013, and the results of their operations and their cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

 

March 25, 2015

534 Union Boulevard ▪ Totowa Boro, NJ 07512 ▪ 973.595.5300 phone ▪ 973.595.5890 fax ▪ www.fasbhome.com

F-2

SUNNYSIDE BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

​	December 31,
​	2014			2013
Assets	​	​	​	​	​	​
Cash and cash equivalents	​	$	3,719,882	​	$	2,636,523
Securities held to maturity, net; approximate fair value of  $6,378,000 (2014) and $4,809,000 (2013)	​	​	6,154,237	​	​	4,666,508
Securities available for sale	​	​	34,511,669	​	​	38,240,458
Loans receivable, net	​	​	43,219,661	​	​	40,040,109
Premises and equipment, net	​	​	1,612,029	​	​	1,602,451
Federal Home Loan Bank of New York and other stock, at cost	​	​	207,820	​	​	222,420
Accrued interest receivable	​	​	275,571	​	​	267,796
Cash surrender value of life insurance	​	​	2,073,455	​	​	2,008,494
Deferred income taxes	​	​	929,235	​	​	1,046,964
Other assets	​	​	449,821	​	​	519,277
Total assets	​	$	93,153,380	​	$	91,251,000
Liabilities and Stockholders’ Equity	​			​
Liabilities:	​	​	​	​	​	​
Deposits	​	$	79,555,416	​	$	78,024,604
Advances from borrowers for taxes and insurance	​	​	731,757	​	​	693,183
Other liabilities	​	​	668,090	​	​	597,210
Total liabilities	​	​	80,955,263	​	​	79,314,997
Commitments and contingencies	​	​	—	​	​	—
Stockholders’ equity:	​	​	​	​	​	​
Serial preferred stock; par value $.01, 1,000,000 shares authorized, no shares issued	​	​	—	​	​	—
Common stock; par value $.01, 30,000,000 shares authorized and 793,500 shares issued	​	​	7,935	​	​	7,935
Additional paid-in capital	​	​	7,081,577	​	​	7,082,343
Unallocated common stock held by the Employee Stock Ownership Plan	​	​	(511,030)	​	​	(533,229)
Retained earnings	​	​	6,435,539	​	​	6,645,906
Accumulated other comprehensive (loss)	​	​	(815,904)	​	​	(1,266,952)
Total stockholders’ equity	​	​	12,198,117	​	​	11,936,003
Total liabilities and stockholders’ equity	​	$	93,153,380	​	$	91,251,000

See accompanying notes to consolidated financial statements.

F-3

SUNNYSIDE BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

​	Year Ended December 31,
​	2014			2013
Interest and dividend income:	​	​	​	​	​	​
Loans	​	$	1,847,551	​	$	1,932,161
Investment securities	​	​	170,171	​	​	121,214
Mortgage-backed securities	​	​	671,296	​	​	631,882
Federal funds sold and other earning assets	​	​	10,317	​	​	5,750
Total interest and dividend income	​	​	2,699,335	​	​	2,691,007
Interest expense:	​	​	​	​	​	​
Deposits	​	​	396,720	​	​	573,900
Borrowings	​	​	354	​	​	35
Total interest expense	​	​	397,074	​	​	573,935
Net interest income	​	​	2,302,261	​	​	2,117,072
Provision for loan losses	​	​	55,910	​	​	24,500
Net interest income after provision for loan losses	​	​	2,246,351	​	​	2,092,572
Non-interest income:	​	​	​	​	​	​
Fees and service charges	​	​	92,114	​	​	99,488
Net gain on sale of securities	​	​	18,078	​	​	163,959
Income on bank owned life insurance	​	​	64,961	​	​	63,560
Total non-interest income	​	​	175,153	​	​	327,007
Non-interest expense:	​	​	​	​	​	​
Compensation and benefits	​	​	1,342,714	​	​	1,307,729
Occupancy and equipment, net	​	​	399,737	​	​	386,404
Data processing service fees	​	​	204,205	​	​	165,566
Professional fees	​	​	471,329	​	​	338,085
Federal deposit insurance premiums	​	​	63,639	​	​	61,703
Advertising and promotion	​	​	101,578	​	​	75,928
Other	​	​	226,170	​	​	235,008
Total non-interest expense	​	​	2,809,372	​	​	2,570,423
(Loss) before income taxes	​	​	(387,868)	​	​	(150,844)
Income tax (benefit)	​	​	(177,501)	​	​	(91,018)
Net (loss)	​	$	(210,367)	​	$	(59,826)
Basic and diluted loss per share	​	$	(0.28)	​	​	NM
Weighted average shares outstanding basic and diluted	​	​	741,383	​	​	342,159

(NM) Not meaningful or not applicable because the Company went public on July 15, 2013.

See accompanying notes to consolidated financial statements.

F-4

SUNNYSIDE BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

​	Year Ended December 31,
​	2014			2013
Net (loss)	​	$	(210,367)	​	$	(59,826)
Other comprehensive income (loss), before tax:	​	​	​	​	​	​
Defined benefit pension plans:	​	​	​	​	​	​
Net loss arising during the period	​	​	(208,328)	​	​	(122,358)
Amortization of loss included in net periodic plan cost	​	​	72,841	​	​	64,505
Unrealized gains (losses) on securities available for sale:	​	​	​	​	​	​
Unrealized holding gains (losses) arising during the period	​	​	897,094	​	​	(1,068,507)
Reclassification adjustment for (gains) losses included in operations	​	​	(13,653)	​	​	(159,163)
Other comprehensive income (loss), before tax	​	​	747,954	​	​	(1,285,523)
Income tax (benefit) expense related to items of other comprehensive income	​	​	296,906	​	​	(510,298)
Other comprehensive income (loss), net of tax	​	​	451,048	​	​	(775,225)
Comprehensive income (loss)	​	$	240,681	​	$	(835,051)

See accompanying notes to consolidated financial statements.

F-5

SUNNYSIDE BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

​

Common Stock

Additional Paid-in Capital

Unallocated Common Stock Held by ESOP

Retained Earnings

Accumulated Other Comprehensive Income (Loss)

Total Equity

Balance at December 31, 2012

​

$

—

​

$

—

​

$

—

​

$

6,705,732

​

$

(491,727)

​

$

6,214,005

Issuance of common stock at conversion

​

​

7,935

​

​

7,082,343

​

​

—

​

​

—

​

​

—

​

​

7,090,278

Acquisition of ESOP shares

​

​

—

​

​

—

​

​

(555,450)

​

​

—

​

​

—

​

​

(555,450)

Net Loss

​

​

—

​

​

—

​

​

—

​

​

(59,826)

​

​

—

​

​

(59,826)

ESOP shares allocated or committed to be released

​

​

—

​

​

—

​

​

22,221

​

​

—

​

​

—

​

​

22,221

Other comprehensive loss, net of tax

​

​

—

​

​

—

​

​

—

​

​

—

​

​

(775,225)

​

​

(775,225)

Balance at December 31, 2013

​

​

7,935

​

​

7,082,343

​

​

(533,229)

​

​

6,645,906

​

​

(1,266,952)

​

​

11,936,003

Net Loss

​

​

—

​

​

—

​

​

—

​

​

(210,367)

​

​

—

​

​

(210,367)

ESOP shares allocated or committed to be released

​

​

—

​

​

(766)

​

​

22,199

​

​

—

​

​

—

​

​

21,433

Other comprehensive income, net of tax

​

​

—

​

​

—

​

​

—

​

​

—

​

​

451,048

​

​

451,048

Balance at December 31, 2014

​

$

7,935

​

$

7,081,577

​

$

(511,030)

​

$

6,435,539

​

$

(815,904)

​

$

12,198,117

See accompanying notes to consolidated financial statements.

F-6

SUNNYSIDE BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

​	Year Ended December 31,
​	2014			2013
Cash flows from operating activities:	​	​	​	​	​	​
Net (loss)	​	$	(210,367)	​	$	(59,826)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:	​	​	​	​	​	​
Depreciation expense	​	​	152,678	​	​	134,259
Amortization of premiums and accretion of discounts, net	​	​	199,279	​	​	300,128
Amortization of deferred loan fees and costs, net	​	​	19,942	​	​	(3,731)
Provision for loan losses	​	​	55,910	​	​	24,500
Net gain on sales of securities	​	​	(18,078)	​	​	(163,959)
(Increase) decrease in accrued interest receivable	​	​	(7,775)	​	​	12,403
Increase in cash surrender value of life insurance	​	​	(64,961)	​	​	(63,560)
Net (increase) decrease in other assets	​	​	(109,721)	​	​	218,564
Net decrease in other liabilities	​	​	(64,607)	​	​	(409,528)
Amortization of ESOP shares	​	​	21,433	​	​	22,221
Net cash (used in) provided by operating activities	​	​	(26,267)	​	​	11,471
Cash flows from investing activities:	​	​	​	​	​	​
Purchases of securities available for sale	​	​	(3,000,000)	​	​	(22,825,587)
Purchases of securities held to maturity	​	​	(2,552,844)	​	​	—
Repayments and maturities of securities held to maturity	​	​	838,155	​	​	2,755,081
Repayments and maturities of securities available for sale	​	​	5,549,488	​	​	9,052,074
Proceeds from sales of securities held to maturity	​	​	230,771	​	​	2,764,870
Proceeds from sales of securities available for sale	​	​	1,877,730	​	​	7,381,400
Redemption (purchase) of Federal Home Loan Bank and other stock	​	​	14,600	​	​	(21,300)
Loans purchased	​	​	—	​	​	(2,235,964)
Loan originations, net of principal repayments	​	​	(3,255,404)	​	​	2,080,404
Purchases of bank premises and equiment	​	​	(162,256)	​	​	(121,300)
Net cash used in investing activities	​	​	(459,760)	​	​	(1,170,322)
Cash flows from financing activities:	​	​	​	​	​	​
Net increase (decrease) in deposits	​	​	1,530,812	​	​	(8,161,073)
Net increase (decrease) in advances from borrowers for taxes and insurance	​	​	38,574	​	​	(12,853)
Net proceeds from stock conversion	​	​	—	​	​	6,534,828
Net cash provided by (used in) financing activities	​	​	1,569,386	​	​	(1,639,098)
Net increase (decrease) in cash and cash equivalents	​	​	1,083,359	​	​	(2,797,949)
Cash and cash equivalents at beginning of year	​	​	2,636,523	​	​	5,434,472
Cash and cash equivalents at end of year	​	$	3,719,882	​	$	2,636,523
Supplemental Information:	​	​	​	​	​	​
Cash paid for:	​	​	​	​	​	​
Interest	​	$	396,287	​	$	573,935
Income taxes (refunds received), net	​	$	(36,966)	​	$	(9,895)

See accompanying notes to consolidated financial statements.

F-7

 

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following is a description of the more significant policies used in the presentation of the accompanying consolidated financial statements of Sunnyside Bancorp, Inc. and Subsidiary (the “Company”).

Principles of Consolidation

The consolidated financial statements are comprised of the accounts of Sunnyside Bancorp. Inc., and its wholly-owned subsidiary, Sunnyside Federal Savings and Loan Association of Irvington (the “Association”). All significant intercompany accounts and transactions have been eliminated in consolidation.

Business

Sunnyside Federal Savings and Loan Association of Irvington is a community-oriented savings institution whose primary business is accepting deposits from customers within its market area (Westchester County, New York) and investing those funds in mortgage loans secured by one-to-four family residences and in mortgage-backed and other securities. To a significantly lesser extent, funds are invested in multi-family and commercial mortgage loans, commercial loans, and consumer loans. Customer deposits are insured up to applicable limits by the Federal Deposit Insurance Corporation (the “FDIC”). As a federally-chartered savings association, the Association’s primary regulator is the Office of the Controller of the Currency (the “OCC”).

Basis of Financial Statement Presentation

The financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statement of financial condition and revenues and expenses for the period then ended. Actual results could differ significantly from those estimates.

A material estimate that is particularly susceptible to significant change relates to the determination of the allowance for loan losses. Management believes that the allowance for loan losses is adequate. While management uses available information to recognize losses on loans, future additions to the allowance for loan losses may be necessary based on changes in economic conditions in the Company’s market area.

In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses. Such agencies may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination.

Cash and Cash Equivalents

For purposes of reporting cash flows, the Company considers all cash and amounts due from depository institutions and interest-bearing deposits in other depository institutions with original maturities of three months or less to be cash equivalents.

Investment and Mortgage-Backed Securities

Securities that the Company has the positive intent and ability to hold to maturity are classified as held-to-maturity securities and reported at amortized cost. Securities classified as available-for-sale securities are reported at fair value, with unrealized holding gains or losses reported in a separate component of retained earnings. As of December 31, 2014 and 2013, the Company had no securities classified as held for trading.

The Company conducts a periodic review and evaluation of the securities portfolio to determine if a decline in the fair value of any security below its cost basis is other-than-temporary. The evaluation of other-than-temporary impairment considers the duration and severity of the impairment, the Company’s

F-8

 

 

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 

intent and ability to hold the securities and assessments of the reason for the decline in value and the likelihood of a near-term recovery. If such a decline is deemed other-than-temporary, the security is written down to a new cost basis and the resulting loss is charged to income as a component of non-interest expense.

Premiums and discounts on securities are amortized by use of the level-yield method, over the life of the individual securities. Gain or loss on sales of securities is based upon the specific identification method.

Loans Receivable

Loans receivable are stated at unpaid principal balances less the allowance for loan losses and net deferred loan fees.

Recognition of interest on the accrual method is generally discontinued when interest or principal payments are ninety days or more in arrears, or when other factors indicate that the collection of such amounts is doubtful. At that time, a loan is placed on a nonaccrual status, and all previously accrued and uncollected interest is reversed against interest income in the current period. Interest on such loans, if appropriate, is recognized as income when payments are received. A loan is returned to an accrual status when factors indicating doubtful collectibility no longer exist.

Allowance for Loan Losses

An allowance for loan losses is maintained at a level, to the best of management’s knowledge, to cover all known and inherent losses in the portfolio that are both probable and reasonable to estimate. Management of the Association, in determining the provision for loan losses considers the risks inherent in its loan portfolio and changes in the nature and volume of its loan activities, along with the general economic and real estate market conditions. The Company utilizes a two tier approach: (1) identification of problem loans and establishment of specific loss allowances on such loans; and (2) establishment of general valuation allowances on the remainder of its loan portfolio. The Company maintains a loan review system which allows for a periodic review of its loan portfolio and the early identification of potential problem loans. Such system takes into consideration, among other things, delinquency status, size of loans, type of collateral, and financial condition of the borrowers. Specific loan losses are established for identified loans based on a review of such information and appraisals of the underlying collateral. General loan losses are based upon a combination of factors including, but not limited to, actual loan loss experience, composition of the loan portfolio, current economic conditions, and management’s judgment. Although management believes that adequate specific and general loan loss allowances are established, actual losses are dependent upon future events and, as such, further additions to the level of specific and general loan loss allowances may be necessary.

A loan evaluated for impairment is deemed to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. An insignificant payment delay, which is defined as up to ninety days by the Company, will not cause a loan to be classified as impaired. A loan is not impaired during a period of delay in payment if the Association expects to collect all amounts due, including interest accrued at the contractual interest rate for the period of delay. The amount of loan impairment is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or, as a practical expedient, at the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. All loans identified as impaired are evaluated independently. The Association does not aggregate such loans for evaluation purposes.

F-9

 

 

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 

Federal Home Loan Bank of New York stock

As a member of the Federal Home Loan Bank of New York (“FHLB”), the Company is required to acquire and hold shares of FHLB Class B stock. The holding requirement varies based on the Company’s activities, primarily its outstanding borrowings, with the FHLB. The investment in FHLB stock is carried at cost. The Company conducts a periodic review and evaluation of its FHLB stock to determine if any impairment exists.

Premises and Equipment

Premises and equipment are comprised of land, building, and furniture, fixtures, and equipment, at cost, less accumulated depreciation. Depreciation charges are computed on the straight-line method over the following estimated useful lives:

Building and improvements	5 to 40 years
Furniture, fixtures and equipment	2 to 10 years

Bank-Owned Life Insurance

Bank-owned life insurance (“BOLI”) is accounted for in accordance with Financial Accounting Standards Board “FASB”) guidance. The cash surrender value of BOLI is recorded on the statement of financial condition as an asset and the change in the cash surrender value is recorded as non-interest income. The amount by which any death benefits received exceeds a policy’s cash surrender value is recorded in non-interest income at the time of receipt. A liability is also recorded on the statement of financial condition for postretirement death benefits provided by the split-dollar endorsement policy. A corresponding expense is recorded in non-interest expense for the accrual of benefits over the period during which employees provide services to earn the benefits.

Income Taxes

Federal and state income taxes have been provided on the basis of reported income. The amounts reflected on the tax return differ from these provisions due principally to temporary differences in the reporting of certain items for financial reporting and income tax reporting purposes. The tax effect of these temporary differences is accounted as deferred taxes applicable to future periods. Deferred income tax expense or benefit is determined by recognizing deferred tax assets and liabilities for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. The realization of deferred tax assets is assessed and a valuation allowance provided, when necessary, for that portion of the asset which is not likely to be realized.

The Company accounts for uncertainty in income taxes recognized in the financial statements in accordance with accounting guidance which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As a result of the Company’s evaluation, no significant income tax uncertainties have been identified. Therefore, the Company recognized no adjustment for unrecognized income tax benefits for the years ended December 31, 2014 and 2013. The Company’s policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense in the statement of income. The amount of interest and penalties for the years ended December 31, 2014 and 2013 was immaterial. The Company is subject to U.S. federal income tax, as well as income tax of the State of New York. The Company is no longer subject to examination by taxing authorities for years before 2010.

F-10

 

 

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 

Employee Benefits

Defined Benefit Plans:

The accounting guidance related to retirement benefits requires an employer to: (a) recognize in its statement of financial position an asset for a plan’s overfunded status or a liability for a plan’s underfunded status; (b) measure a plan’s assets and its obligations that determine its funded status as of the end of the employer’s fiscal year; and (c) recognize, in comprehensive income, changes in the funded status of a defined benefit postretirement plan in the year in which the changes occur. The accounting guidance requires that plan assets and benefit obligations be measured as of the date of the employer’s fiscal year-end statement of financial condition.

401K Plan:

The Company has a 401(k) plan covering substantially all employees. The Company matches 50% of the first 6% contributed by participants and recognizes expense as its contributions are made.

Employee Stock Ownership Plan:

The employee stock ownership plan (ESOP) is accounted for in accordance with the provisions of ASC 718-40, “Employers’ Accounting for Employee Stock Ownership Plans.” The funds borrowed by the ESOP from the Company to purchase the Company’s common stock are being repaid from the Association’s contributions over a period of up to 25 years. The Company’s common stock not yet allocated to participants is recorded as a reduction of stockholders’ equity at cost. Compensation expense for the ESOP is based on the market price of the Company’s stock and is recognized as shares are committed to be released to participants.

Equity Incentive Plan:

On July 17, 2014, the Board of Directors adopted the Sunnyside Bancorp, Inc. 2014 Equity Incentive Plan (the “Stock Incentive Plan”) which was approved by shareholders at the Company’s 2014 Annual Meeting of Shareholders held on September 16, 2014. Stock options and restricted stock may be granted to directors, officers and other employees of the Company. The maximum number of shares which may be issued upon exercise of the options under the plan cannot exceed 79,350 shares. The maximum number of shares of stock that may be issued as restricted stock awards cannot exceed 23,805.

The Stock Incentive Plan will remain in effect as long as any awards under it are outstanding; however, no awards may be granted under the Stock Incentive Plan on or after the 10-year anniversary of the effective date of the Stock Incentive Plan or July 17, 2024.

Under FASB ASC Topic 718, the Company will recognize compensation expense on its income statement over the requisite service period or performance period based on the grant date fair value of stock options and other equity-based compensation (such as restricted stock). No awards have been granted under the 2014 Stock Incentive Plan and therefore, no compensation expense was recognized through December 31, 2014.

Comprehensive Income

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, and the actuarial gains and losses of the pension plan, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income.

Concentration of Credit Risk and Interest-Rate Risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, investment and mortgage-backed securities and loans. Cash and cash

F-11

 

 

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 

equivalents include amounts placed with highly rated financial institutions. Investment securities include securities backed by the U.S. Government and other highly rated instruments. The Company’s lending activity is primarily concentrated in loans collateralized by real estate in the State of New York. As a result, credit risk is broadly dependent on the real estate market and general economic conditions in the state.

The Company is principally engaged in the business of attracting deposits from the general public and using these deposits, together with borrowings and other funds, to make loans secured by real estate in the State of New York. The potential for interest-rate risk exists as a result of the shorter duration of interest-sensitive liabilities compared to the generally longer duration of interest-sensitive assets. In a rising rate environment, liabilities will reprice faster than assets, thereby reducing net interest income. For this reason, management regularly monitors the maturity structure of the Company’s assets and liabilities in order to measure its level of interest-rate risk and to plan for future volatility.

Earnings Per Share

Basic earnings per common share, or EPS, are computed by dividing net income by the weighted-average common shares outstanding during the year. The weighted-average common shares outstanding includes the weighted-average number of shares of common stock outstanding less the weighted average number of unallocated shares held by the ESOP. For EPS calculations, ESOP shares that have been committed to be released are considered outstanding. ESOP shares that have not been committed to be released are excluded from outstanding shares on a weighted average basis for EPS calculations.

Earnings per share are not applicable for periods prior to the date of conversion, July 15, 2013.

Reclassifications

Certain amounts in the 2013 financial statements have been reclassified in order to conform to the 2014 presentation.

Advertising Costs

It is the Company’s policy to expense advertising costs in the period in which they are incurred.

Subsequent Events

The Company has evaluated all events subsequent to the balance sheet date of December 31, 2014, through the date of this report, and has determined that there are no subsequent events that require disclosure under FASB guidance.

Recent Accounting Pronouncements

In January 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-04, “Receivables — Troubled Debt Restructurings by Creditors (Subtopic 310-40) Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure,” which applies to all creditors who obtain physical possession of residential real estate property collateralizing a consumer mortgage loan in satisfaction of a receivable. The amendments in this update clarify when an in substance repossession or foreclosure occurs and requires disclosure of both (1) the amount of foreclosed residential real estate property held by a creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments in ASU 2014-04 are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2014. Early adoption is permitted and entities can elect to adopt a modified retrospective transition method or a prospective transition method. The adoption of this guidance should not have a material impact on the Company’s financial condition or results of operations.

In June 2014, the FASB issued ASU 2014-12, “Compensation — Stock Compensation (Topic 718)”. The amendments in this ASU require a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The performance target should not

F-12

 

 

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 

Recent Accounting Pronouncements (cont’d)

be reflected in estimating the grant-date fair value of the award, and compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The amendments in this ASU are effective for annual periods beginning after December 15, 2015. The adoption of this guidance should not have a material impact on the Company’s financial condition or results of operations.

In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” This update is intended to provide guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Management is required under the new guidance to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued when preparing financial statements for each interim and annual reporting period. If conditions or events are identified, the ASU specifies the process that must be followed by management and also clarifies the timing and content of going concern footnote disclosures in order to reduce diversity in practice. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2016. Early adoption is permitted. The adoption of this guidance should not have a material impact on the Company’s financial condition or results of operations.

In January 2015, the FASB issued ASU 2015-01, “Income Statement — Extraordinary and Unusual Items (Subtopic 225-20)”. This ASU eliminates extraordinary items from US GAAP and will align more closely with International Accounting Standards 1, “Presentation of Financial Statements”. The amendments in this ASU are effective beginning after December 15, 2015. The adoption of this guidance should not have a material impact on the Company’s financial condition or results of operations.

In February 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810)”. This ASU focuses on the consolidation evaluation for reporting organizations that are required to evaluate consolidation of certain legal entities by reducing the number of consolidation models from four to two and is intended to improve current GAAP. The amendments in this ASU are effective beginning after December 15, 2016. The adoption of this guidance should not have a material impact on the Company’s financial condition or results of operations.

2.   MUTUAL TO STOCK CONVERSION AND LIQUIDATION ACCOUNT

On July 15, 2013, the Association completed its mutual-to-stock conversion, and the Company consummated its initial stock offering. The Company sold 793,500 shares of its common stock, including 55,545 shares purchased by the Association’s employee stock ownership plan (“ESOP”), at a price of  $10.00 per share, in a subscription offering, for gross offering proceeds of  $7,935,000. The cost of conversion and the stock offering were deferred and deducted from the proceeds of the offering. Conversion costs incurred totaled $845,000 resulting in net proceeds of  $6.5 million after also deducting the shares acquired by the ESOP.

In accordance with applicable federal conversion regulations, at the time of the completion of the mutual-to-stock conversion, the Company established a liquidation account in the Association in an amount equal to the Association’s total retained earnings as of the latest balance sheet date in the final prospectus used in the conversion. Each eligible account holder or supplemental account holder is entitled to a proportionate share of this liquidation account in the event of a complete liquidation of the Association, and only in such event. This share will be reduced if the eligible account holder’s or supplemental account holder’s deposit balance falls below the amounts on the date of record as of any December 31 and will cease to exist if the account is closed. The liquidation account will never be increased despite any increase after conversion in the related deposit balance.

F-13

 

 

2.   MUTUAL TO STOCK CONVERSION AND LIQUIDATION ACCOUNT (Continued)
 

The Company may not declare, pay a dividend on, or repurchase any of its capital stock, if the effect thereof would cause retained earnings to be reduced below the liquidation account amount or regulatory capital requirements.

3.   SECURITIES

​

December 31, 2014

​

Amortized Cost

Gross Unrealized

Fair Value

​

Gains

Losses

Securities held to maturity:

​

​

​

​

​

​

​

​

​

​

​

​

U.S. government and agency obligations

​

$

2,000,000

​

$

76,654

​

$

—

​

$

2,076,654

State, county, and municipal obligations

​

​

817,280

​

​

10,234

​

​

2,423

​

​

825,091

Mortgage-backed securities

​

​

3,336,957

​

​

138,807

​

​

—

​

​

3,475,764

​

​

$

6,154,237

​

$

225,695

​

$

2,423

​

$

6,377,509

Securities available for sale:

​

​

​

​

​

​

​

​

​

​

​

​

U.S. government and agency obligations

​

$

5,997,345

​

$

2,025

​

$

58,756

​

$

5,940,614

Mortgage-backed securities

​

​

28,526,918

​

​

229,096

​

​

184,959

​

​

28,571,055

​

​

$

34,524,263

​

$

231,121

​

$

243,715

​

$

34,511,669

​

December 31, 2013

​

Amortized Cost

Gross Unrealized

Fair Value

​

Gains

Losses

Securities held to maturity:

​

​

​

​

​

​

​

​

​

​

​

​

State, county, and municipal obligations

​

$

489,566

​

$

17,035

​

$

—

​

$

506,601

Mortgage-backed securities

​

​

4,176,942

​

​

125,291

​

​

—

​

​

4,302,233

​

​

$

4,666,508

​

$

142,326

​

$

—

​

$

4,808,834

Securities available for sale:

​

​

​

​

​

​

​

​

​

​

​

​

U.S. government and agency obligations

​

$

3,996,781

​

$

—

​

$

225,048

​

$

3,771,733

Mortgage-backed securities

​

​

35,139,713

​

​

100,428

​

​

771,416

​

​

34,468,725

​

​

$

39,136,494

​

$

100,428

​

$

996,464

​

$

38,240,458

Mortgage-backed securities consist of securities guaranteed by Ginnie Mae, Fannie Mae, Freddie Mac, and the Small Business Administration with amortized costs of  $5.1 million, $14.0 million, $7.3 million, and $5.5 million, respectively, at December 31, 2014 ($6.3 million, $16.4 million, $9.1 million, and $7.5 million, respectively, at December 31, 2013).

Proceeds from the sale of securities available for sale amounted to $1,878,000 and $7,381,000 for the years ended December 31, 2014 and December 31, 2013, respectively. Net gains of  $13,700 and $4,800 were recognized on these sales for the years ended December 31, 2014 and 2013, respectively.

Proceeds from the sale of securities held to maturity amounted to $231,000 and $2,765,000 for the years ended December 31, 2014 and 2013, respectively. Net gains of  $4,400 and $159,000 were recognized on these sales, respectively. The sale of the securities occurred after the Company had already collected a substantial portion (at least 85%) of the principal outstanding at acquisition due to prepayments on the debt securities.

The following is a summary of the amortized cost and fair value of securities at December 31, 2014 and 2013, by remaining period to contractual maturity. Actual maturities may differ from these amounts because certain debt security issuers have the right to call or redeem their obligations prior to contractual maturity. In addition, mortgage backed securities that amortize monthly are listed in the period the security is legally set to pay off in full.

F-14

 

 

3.   SECURITIES (Continued)
 

​

December 31, 2014

​

Held to Maturity

Available for Sale

​

Amortized Cost

Fair Value

Amortized Cost

Fair Value

Within one year

​

$

—

​

$

—

​

$

—

​

$

—

After one to five years

​

​

391,777

​

​

394,383

​

​

3,997,344

​

​

3,957,863

After five to ten years

​

​

79,829

​

​

82,066

​

​

8,769,676

​

​

8,803,062

After ten years

​

​

5,682,631

​

​

5,901,060

​

​

21,757,243

​

​

21,750,744

​

​

$

6,154,237

​

$

6,377,509

​

$

34,524,263

​

$

34,511,669

​

December 31, 2013

​

Held to Maturity

Available for Sale

​

Amortized Cost

Fair Value

Amortized Cost

Fair Value

Within one year

​

$

—

​

$

—

​

$

—

​

$

—

After one to five years

​

​

110,095

​

​

116,846

​

​

574,576

​

​

577,199

After five to ten years

​

​

379,471

​

​

389,755

​

​

12,429,566

​

​

12,191,416

After ten years

​

​

4,176,942

​

​

4,302,233

​

​

26,132,352

​

​

25,471,843

​

​

$

4,666,508

​

$

4,808,834

​

$

39,136,494

​

$

38,240,458

The following tables summarize the fair values and unrealized losses of securities with an unrealized loss at December 31, 2014 and 2013, segregated between securities that have been in an unrealized loss position for less than one year, or one year or longer, at the respective dates.

​

December 31, 2014

​

Under One Year

One Year or More

​

Fair Value

Gross Unrealized Loss

Fair Value

Gross Unrealized Loss

Securities available for sale:

​

​

​

​

​

​

​

​

​

​

​

​

U.S. government and agency obligations

​

$

999,738

​

$

262

​

$

2,938,851

​

$

58,494

Mortgage-backed securities

​

​

5,573,324

​

​

21,827

​

​

6,116,841

​

​

163,131

​

​

​

6,573,062

​

​

22,089

​

​

9,055,692

​

​

221,625

Securities held to maturity:

​

​

​

​

​

​

​

​

​

​

​

​

State, county, and municipal obligations

​

​

204,584

​

​

2,423

​

​

—

​

​

—

​

​

$

6,777,646

​

$

24,512

​

$

9,055,692

​

$

221,625

​

December 31, 2013

​

Under One Year

One Year or More

​

Fair Value

Gross Unrealized Loss

Fair Value

Gross Unrealized Loss

Securities available for sale:

​

​

​

​

​

​

​

​

​

​

​

​

U.S. government and agency obligations

​

$

3,771,733

​

$

225,048

​

$

—

​

$

—

Mortgage-backed securities

​

​

20,801,105

​

​

447,844

​

​

3,941,749

​

​

323,572

​

​

$

24,572,838

​

$

672,892

​

$

3,941,749

​

$

323,572

The unrealized losses are primarily due to changes in market interest rates subsequent to purchase. At December 31, 2014, a total of 19 securities were in an unrealized loss position (33 at December 31, 2013). The Company generally purchases securities issued by Government Sponsored Enterprises (GSE).

F-15

 

 

3.   SECURITIES (Continued)
 

Accordingly, it is expected that the GSE securities would not be settled at a price less than the Company’s amortized cost basis. The Company does not consider these investments to be other-than-temporarily impaired at December 31, 2014 and December 31, 2013 since the decline in market value is attributable to changes in interest rates and not credit quality and the Company has the intent and ability to hold these investments until there is a full recovery of the unrealized loss, which may be at maturity.

4.   LOANS RECEIVABLE, NET

​	December 31,
​	2014			2013
Mortgage loans:	​			​
Residential 1 – 4 family	​	$	31,457,055	​	$	33,526,400
Commercial and multi-family	​	​	9,428,335	​	​	5,548,498
Home equity lines of credit	​	​	369,795	​	​	689,805
​	​	​	41,255,185	​	​	39,764,703
Other loans:	​			​
Secured by savings accounts	​	​	32,371	​	​	43,683
Student	​	​	126,688	​	​	—
Commercial	​	​	2,155,951	​	​	500,000
​	​	​	2,315,010	​	​	543,683
Total loans	​	​	43,570,195	​	​	40,308,386
Less:	​			​
Deferred loan fees (costs), net	​	​	(45,521)	​	​	(71,868)
Allowance for loan losses	​	​	396,055	​	​	340,145
​	​	​	350,534	​	​	268,277
​	​	$	43,219,661	​	$	40,040,109

In the ordinary course of business, the Company makes loans to its directors, executive officers, and their associates (related parties) on the same terms as those prevailing at the time of origination for comparable loans with other borrowers. The unpaid principal balances of related party loans were approximately $228,000 and $260,000 at December 31, 2014 and 2013, respectively.

Activity in the allowance for loan losses is summarized as follows:

​	Year Ended December 31,
​	2014			2013
Balance at beginning of year	​	$	340,145	​	$	314,490
Provision for loan losses	​	​	55,910	​	​	24,500
Charge offs	​	​	—	​	​	—
Recoveries	​	​	—	​	​	1,155
Balance at end of year	​	$	396,055	​	$	340,145

The allowance for loan losses consists of specific, general and unallocated components. The specific component relates to loans that are classified as impaired. For loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. There are no specific allowances as of December 31, 2014 and 2013. The general component covers pools of loans by loan class not considered

F-16

 

 

4.   LOANS RECEIVABLE, NET (Continued)
 

impaired, as well as smaller balance homogeneous loans, such as one-to-four family real estate, home equity lines of credit and other consumer loans. These pools of loans are evaluated for loss exposure based upon historical loss rates for each of these categories of loans, adjusted for qualitative factors. These qualitative risk factors include:

1.

Lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices.

2.

National, regional, and local economic and business conditions including the value of underlying collateral for collateral dependent loans.

3.

Nature and volume of the portfolio and terms of loans.

4.

Experience, ability, and depth of lending management and staff and the quality of the Association’s loan review system.

5.

Volume and severity of past due, classified and nonaccrual loans.

6.

Existence and effect of any concentrations of credit and changes in the level of such concentrations.

7.

Effect of external factors, such as competition and legal and regulatory requirements.

Each factor is assigned a value to reflect improving, stable or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation. Adjustments to the factors are supported through documentation of changes in conditions in a narrative accompanying the allowance for loan loss calculation.

An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio.

The allowance calculation methodology includes further segregation of loan classes into risk rating categories. The borrower’s overall financial condition, repayment sources, guarantors and value of collateral, if appropriate, are evaluated when credit deficiencies arise, such as delinquent loan payments. Credit quality risk ratings include regulatory classifications of pass, special mention, substandard, doubtful and loss.

Loan classifications are defined as follows:

•

Pass — These loans are well protected by the current net worth and paying capacity of the obligor (or guarantors, if any) or by the fair value, less cost to acquire and sell, of any underlying collateral in a timely manner.

•

Special Mention — These loans have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of repayment prospects.

•

Substandard — These loans are inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged, if any. Assets so classified must have a well-defined weakness, or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

•

Doubtful — These loans have all the weaknesses inherent in a loan classified substandard with the added characteristic that the weaknesses make the full recovery of our principal balance highly questionable and improbable on the basis of currently known facts, conditions, and values. The likelihood of a loss on an asset or portion of an asset classified as doubtful is high. Its classification as Loss is not appropriate, however, because pending events are expected to materially affect the amount of loss.

F-17

 

 

4.   LOANS RECEIVABLE, NET (Continued)
 

•
Loss — These loans are considered uncollectible and of such little value that a charge-off is warranted. This classification does not necessarily mean that an asset has no recovery or salvage value; but rather, there is much doubt about whether, how much, or when the recovery will occur.

One of the primary methods the Company uses as an indicator of the credit quality of their portfolio is the regulatory classification system. The following table reflects the credit quality indicators by portfolio segment and class, at the dates indicated:

​

December 31, 2014

​

Mortgage Loans

Commercial and Other

Total

​

Residential 1 – 4 Family

Commercial Real Estate and Multi-Family

Home Equity

​

(In thousands)

Pass

​

$

31,025

​

$

8,974

​

$

370

​

$

2,315

​

$

42,684

Special Mention

​

​

—

​

​

454

​

​

—

​

​

—

​

​

454

Substandard

​

​

432

​

​

—

​

​

—

​

​

—

​

​

432

Total

​

$

31,457

​

$

9,428

​

$

370

​

$

2,315

​

$

43,570

​

December 31, 2013

​

Mortgage Loans

Commercial and Other

Total

​

Residential 1 – 4 Family

Commercial and Multi-Family

Home Equity

​

(In thousands)

Pass

​

$

33,019

​

$

5,048

​

$

690

​

$

543

​

$

39,300

Special Mention

​

​

138

​

​

501

​

​

—

​

​

—

​

​

639

Substandard

​

​

369

​

​

—

​

​

—

​

​

—

​

​

369

Total

​

$

33,526

​

$

5,549

​

$

690

​

$

543

​

$

40,308

The following table provides information about loan delinquencies at the dates indicated:

​	December 31, 2014
​	30 – 59 Days Past Due			60 – 89 Days Past Due			90 Days or More Past Due			Total Past Due			Current Loans			Total Loans			90 Days or More Past Due and Accruing
​	(In thousands)
Residential 1 – 4 family	​	$	—	​	$	—	​	$	297	​	$	297	​	$	31,160	​	$	31,457	​	$	—
Commercial and multi-family	​	​	—	​	​	—	​	​	—	​	​	—	​	​	9,428	​	​	9,428	​	​	—
Home equity lines of credit	​	​	—	​	​	—	​	​	—	​	​	—	​	​	370	​	​	370	​	​	—
Other loans	​	​	—	​	​	—	​	​	—	​	​	—	​	​	2,315	​	​	2,315	​	​	—
​	​	$	—	​	$	—	​	$	297	​	$	297	​	$	43,273	​	$	43,570	​	$	—

F-18

 

 

4.   LOANS RECEIVABLE, NET (Continued)
 

​	December 31, 2013
​	30 – 59 Days Past Due			60 – 89 Days Past Due			90 Days or More Past Due			Total Past Due			Current Loans			Total Loans			90 Days or More Past Due and Accruing
​	(In thousands)
Residential 1 – 4 family	​	$	138	​	$	—	​	$	369	​	$	507	​	$	33,019	​	$	33,526	​	$	—
Commercial and multi-family	​	​	—	​	​	—	​	​	—	​	​	—	​	​	5,549	​	​	5,549	​	​	—
Home equity lines of credit	​	​	—	​	​	198	​	​	—	​	​	198	​	​	492	​	​	690	​	​	—
Other loans	​	​	—	​	​	—	​	​	—	​	​	—	​	​	543	​	​	543	​	​	—
​	​	$	138	​	$	198	​	$	369	​	$	705	​	$	39,603	​	$	40,308	​	$	—

There were no impaired loans or troubled debt restructured loans at December 31, 2014 and 2013.

The following is a summary of loans, by loan type, on which the accrual of income has been discontinued and loans that are contractually past due 90 days or more but have not been classified as non-accrual at the dates indicated:

​	December 31,
​	2014			2013
​	(In thousands)
Residential 1 – 4 family	​	$	432	​	$	369
Commercial and multi-family	​	​	—	​	​	—
Home equity lines of credit	​	​	—	​	​	—
Other loans	​	​	—	​	​	—
Total non-accrual loans	​	​	432	​	​	369
Accruing loans delinquent 90 days or more	​	​	—	​	​	—
Total non-performing loans	​	$	432	​	$	369

The total amount of interest income on non-accrual loans that would have been recognized if interest on all such loans had been recorded based upon original contract terms amounted to approximately $29,600 and $18,500 for the year ended December 31, 2014 and 2013, respectively. The total amount of interest income recognized on non-accrual loans amounted to approximately $15,700 and $6,400 during the year ended December 31, 2014 and 2013, respectively.

The following tables present the activity in the allowance for loan losses by loan type for the years indicated:

​	Year Ended December 31, 2014
​	Mortgage Loans									Other			Unallocated			Total
​	Residential 1 – 4 Family			Commercial and Multi-Family			Home Equity
​	(In thousands)
Beginning balance	​	$	295	​	$	34	​	$	6	​	$	5	​	$	—	​	$	340
Provision for loan losses	​	​	(37)	​	​	57	​	​	(3)	​	​	27	​	​	12	​	​	56
Ending Balance	​	$	258	​	$	91	​	$	3	​	$	32	​	$	12	​	$	396

F-19

 

 

4.   LOANS RECEIVABLE, NET (Continued)
 

​	Year Ended December 31, 2013
​	Mortgage Loans									Other			Unallocated			Total
​	Residential 1 – 4 Family			Commercial and Multi-Family			Home Equity
​	(In thousands)
Beginning balance	​	$	128	​	$	59	​	$	5	​	$	4	​	$	118	​	$	314
Provision for loan losses	​	​	167	​	​	(25)	​	​	1	​	​	—	​	​	(118)	​	​	25
Recoveries	​	​	—	​	​	—	​	​	—	​	​	1	​	​	—	​	​	1
Ending Balance	​	$	295	​	$	34	​	$	6	​	$	5	​	$	—	​	$	340

5.   PREMISES AND EQUIPMENT, NET

​	December 31,
​	2014			2013
Land and land improvements	​	$	766,939	​	$	766,939
Building and building improvements	​	​	2,452,621	​	​	2,387,547
Furniture, fixtures and equipment	​	​	885,434	​	​	788,252
​	​	​	4,104,994	​	​	3,942,738
Less accumulated depreciation	​	​	(2,492,965)	​	​	(2,340,287)
​	​	$	1,612,029	​	$	1,602,451

Depreciation expense for the years ended, December 31, 2014 and 2013, was $152,678 and $134,259, respectively.

6.   ACCRUED INTEREST RECEIVABLE

​	December 31,
​	2014			2013
Loans	​	$	137,154	​	$	140,967
Mortgage-backed securities	​	​	89,211	​	​	107,666
Investment securities	​	​	49,206	​	​	19,163
​	​	$	275,571	​	$	267,796

7.   DEPOSITS

​	December 31,
​	2014					2013
​	Weighted Average Rate		Amount			Weighted Average Rate		Amount
Non-interest bearing checking	​	0.00%	​	$	4,736,482	​	0.00%	​	$	3,575,695
NOW accounts	​	0.05%	​	​	10,730,326	​	0.05%	​	​	9,577,864
Regular savings and clubs	​	0.10%	​	​	21,479,246	​	0.10%	​	​	20,445,862
Super saver	​	0.15%	​	​	7,443,330	​	0.15%	​	​	8,491,734
Money market	​	0.10%	​	​	3,464,679	​	0.10%	​	​	3,339,699
​	​	​	​	​	47,854,063	​	​	​	​	45,430,854
Certificates of deposit	​	1.04%	​	​	31,701,353	​	1.47%	​	​	32,593,750
​	​	0.46%	​	$	79,555,416	​	0.72%	​	$	78,024,604

F-20

 

 

7.   DEPOSITS (Continued)
 

Certificates of deposit are summarized by remaining period to contractual maturity as follows:

​	2014			2013
​	(In thousands)
One year or less	​	$	13,953	​	$	19,416
Over one to three years	​	​	15,532	​	​	9,239
Over three years	​	​	2,216	​	​	3,939
​	​	$	31,701	​	$	32,594

Certificates of deposit with balances of  $100,000 or more totaled $11.6 million and $13.8 million at December 31, 2014 and 2013, respectively. The Company’s deposits are insurable to applicable limits established by the Federal Deposit Insurance Corporation. The maximum deposit insurance amount is $250,000.

Interest expense on deposits is summarized as follows:

​	Year Ended December 31,
​	2014			2013
NOW	​	$	5,663	​	$	5,033
Savings and clubs	​	​	31,955	​	​	33,579
Money market	​	​	3,426	​	​	3,397
Certificates of deposit	​	​	355,676	​	​	531,891
​	​	$	396,720	​	$	573,900

8.   INCOME TAXES

The components of income taxes are summarized as follows:

​	Year Ended December 31,
​	2014			2013
Current tax expense (benefit):	​			​
Federal	​	$	(7,412)	​	$	11,570
State	​	​	9,088	​	​	11,251
​	​	​	1,676	​	​	22,821
Deferred tax expense (benefit):	​			​
Federal	​	​	(142,187)	​	​	(91,373)
State	​	​	(36,990)	​	​	(22,466)
​	​	​	(179,177)	​	​	(113,839)
​	​	$	(177,501)	​	$	(91,018)

F-21

 

 

8.   INCOME TAXES (Continued)
 

The following is a reconciliation of expected income taxes (benefit), computed at the applicable federal statutory rate of 34% to the actual income tax expense (benefit):

​	Year Ended December 31,
​	2014			2013
Federal income tax expense (benefit)	​	$	(131,875)	​	$	(51,287)
State income tax expense (benefit)	​	​	(18,415)	​	​	(7,402)
Income from life insurance	​	​	(23,881)	​	​	(22,583)
Tax-exempt interest	​	​	(5,972)	​	​	(9,693)
Other	​	​	2,642	​	​	(53)
Actual income tax (benefit)	​	$	(177,501)	​	$	(91,018)
Effective income tax rate	​	​	-45.76%	​	​	-60.34%

The components of deferred tax assets and liabilities are as follows:

​	December 31,
​	2014			2013
Deferred tax assets:	​			​
Depreciation	​	$	86,409	​	$	78,281
Benefit plan liabilities	​	​	164,863	​	​	171,189
Allowance for loan losses	​	​	125,702	​	​	103,508
Charitable contribution carryover	​	​	1,129	​	​	991
Capital loss carryover	​	​	719,639	​	​	719,639
Net operating loss carryover	​	​	495,585	​	​	317,388
Unfunded pension liability	​	​	532,077	​	​	478,294
Unrealized loss on securities available for sale	​	​	4,999	​	​	355,688
Net deferred loan costs/fees	​	​	7,921	​	​	—
Other	​	​	9,702	​	​	—
​	​	​	2,148,026	​	​	2,224,978
Valuation allowance	​	​	(719,639)	​	​	(719,639)
Total deferred tax assets	​	​	1,428,387	​	​	1,505,339
Deferred tax liabilities:	​			​
Discounts on investments	​	​	591	​	​	333
Prepaid benefit plans	​	​	498,561	​	​	447,203
Net deferred loan costs/fees	​	​	—	​	​	10,180
Other	​	​	—	​	​	659
Total deferred tax liabilities	​	​	499,152	​	​	458,375
Net deferred tax assets	​	$	929,235	​	$	1,046,964

At December 31, 2014, the Company had a federal net operating loss carryover of  $1,252,000 and a New York state net operating loss carryover of  $1,224,000 available to offset future taxable income.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Management believes that it is more likely than not that the tax benefits of certain future deductible temporary differences will be realized based on the reversal of existing temporary

F-22

 

 

8.   INCOME TAXES (Continued)
 

differences and future taxable income, and therefore, a valuation allowance has not been provided for these deferred tax assets. Additionally, management has determined that the realization of certain of the Association’s deferred tax assets related to the capital loss carryover is not more likely than not to be realized due to the fact that the loss can only be offset against capital gains, and as such, has provided a valuation allowance against those deferred tax assets at December 31, 2014 and 2013.

The Association qualifies as a savings and loan association under the provisions of the Internal Revenue Code and, therefore, was permitted, prior to January 1, 1996, to deduct from federal taxable income an allowance for bad debts based on eight percent of taxable income before such deduction less certain adjustments, subject to certain limitations. Beginning January 1, 1996, the Association, for federal income tax purposes, must calculate its bad debt deduction using either the experience or the specific charge off method. Retained earnings at December 31, 2014 included approximately $1,700,000 of such bad deductions for which income taxes have not been provided.

9.   BENEFIT PLANS

Pension Plan

All eligible Company employees are included in a non-contributory defined benefit pension plan. Effective April 15, 2008, the plan was “Frozen.” At the freeze date, no employee will be permitted to commence or recommence participation in the plan and no further benefits will accrue to any plan participants. In addition, compensation received on or after the plan freeze date will not be considered for any purpose under the plan.

The following table sets forth the change in benefit obligation, change in plan assets, and a reconciliation of the funded status:

​	December 31,
​	2014			2013
Change in projected benefit obligation:	​			​
Projected benefit obligation at beginning of year	​	$	2,499,163	​	$	2,278,426
Interest cost	​	​	104,214	​	​	116,099
Actuarial loss	​	​	146,862	​	​	272,169
Benefits paid	​	​	(198,582)	​	​	(167,531)
Projected benefit obligation at end of year	​	​	2,551,657	​	​	2,499,163
Change in fair value of plan assets:	​			​
Fair value of plan assets at beginning of year	​	​	2,450,687	​	​	1,852,575
Actual return on plan assets	​	​	128,964	​	​	339,792
Employer contributions	​	​	112,905	​	​	425,851
Benefits paid	​	​	(198,582)	​	​	(167,531)
Fair value of plan assets at end of year	​	​	2,493,974	​	​	2,450,687
Funded status of plan included in other liabilitites	​	$	(57,683)	​	$	(48,476)

As of December 31, 2014 and 2013, the components of accumulated other comprehensive loss on a pretax basis are an unrecognized actuarial loss of  $1,340,386 and $1,204,899, respectively.

The estimated net actuarial loss for the pension plan that will be amortized from accumulated other comprehensive loss into net periodic benefit cost during 2015 is $81,903.

The weighted average assumptions used to determine the Plan’s benefit obligation are as follows:

F-23

 

 

9.   BENEFIT PLANS (Continued)
 

​	December 31,
​	2014		2013
Discount rate	​	4.50%	​	4.50%
Salary increase rate	​	N/A	​	N/A

The components of net periodic plan cost is as follows:

​	Year Ended December 31,
​	2014			2013
Components of net periodic plan cost (credit):	​			​
Interest cost	​	$	104,214	​	$	116,099
Expected return on assets	​	​	(190,430)	​	​	(189,981)
Amortization of unrecognized loss	​	​	72,841	​	​	64,505
Net periodic plan cost (credit) included in compensation and benefits expense	​	​	(13,375)	​	​	(9,377)
Changes in benefit obligation recognized in other comprehensive (income) loss:	​			​
Net loss	​	​	208,328	​	​	122,358
Amortization of loss	​	​	(72,841)	​	​	(64,505)
Benefit obligation recognized in other comprehensive (income) loss	​	​	135,487	​	​	57,853
Total recognized in net periodic plan cost and other comprehensive (income) loss	​	$	122,112	​	$	48,476

The weighted average assumptions used to determine net periodic plan cost are as follows:

​	Year Ended December 31,
​	2014		2013
Discount rate	​	4.50%	​	5.50%
Expected rate of return on plan assets	​	8.00%	​	9.00%
Rate of compensation increase	​	N/A	​	N/A
Amortization period	​	13.25	​	14.25

Investment Policies and Strategies

Wilmington Trust Retirement & Institutional Services Company acts as Trustee for the Plan. The Plan assets are managed by Pinnacle Associates, Ltd.

The long-term investment objectives are to maintain plan assets at a level that will sufficiently cover long-term obligations and to generate a return on plan assets that will meet or exceed the rate at which long-term obligations will grow. A broadly diversified combination of equity and fixed income portfolios and various risk management techniques are used to help achieve these objectives.

Allowable investments include common stocks, preferred stocks, fixed income securities, depository receipts, money market funds, real estate investment trusts, and publicly traded limited partnerships with the following limitations:

•

The account will be a balanced account, with a target of 60% equity securities and 40% fixed income securities ratio which may vary based on the portfolio manager’s discretion.

•

The account will generally not invest more than 20% of its net assets in cash and cash equivalents.

•

The account will invest, under normal circumstances, between 20% to 60% of its net assets in fixed income securities.

F-24

 

 

9.   BENEFIT PLANS (Continued)
 

•
The account will invest, under normal circumstances, between 30% to 80% of its net assets in equity securities. The equities will be mostly of a large capitalization nature.

•

The account will generally hold between 50 to 90 equity securities.

•

The maximum equity position size will be limited to 5% of net assets at the time of purchase.

•

For equities, each significant economic sector will be considered for the investment.

•

The account may invest up to 15% of its net assets in companies incorporated outside of the United States, at the time of purchase.

•

The account will not sell securities short. Any short transactions in futures, swaps, structured products, and call options will apply to this limit.

The investment goal is to achieve investment results that will contribute to the proper funding of the pension plan by exceeding the rate of inflation over the long term.

Determination of Long-Term Rate-of-Return

The long-term rate-of-return-on-assets assumption was set based on historical returns earned by equities and fixed income securities, adjusted to reflect expectations of future returns as applied to the plan’s target allocation of asset classes. Equities and fixed income securities were assumed to earn real rates of return on in the ranges of 5-9% and 2-6%, respectively. The long-term inflation rate was estimated to be 3%. When these overall return expectations are applied to the plan’s target allocation, the result is an expected rate of return of 4% to 8%.

Estimated Future Benefit Payments

The following benefit payments, which reflect expected future services, as appropriate, are expected to be paid:

Fiscal year ending December 31,	​	​
2015	$	183,307
2016	​	183,655
2017	​	187,562
2018	​	190,162
2019	​	199,672
Years 2020 – 2024	​	1,024,304
​	$	1,968,662

The Company expects to contribute cash of  $113,000 to the plan in 2015.

The fair values of the pension plan assets at December 31, 2014, by asset category (see note 13 for the definition of levels) are as follows:

Asset Category	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Cash and money market funds	​	$	405,115	​	$	405,115	​	$	—	​	$	—
Corporate bonds(a)	​	​	606,331	​	​	—	​	​	606,331	​	​	—
Federal, state and local government bonds	​	​	—	​	​	—	​	​	—	​	​	—
Equity securities(b)	​	​	1,482,528	​	​	1,482,528	​	​	—	​	​	—
Total	​	$	2,493,974	​	$	1,887,643	​	$	606,331	​	$	—

F-25

 

 

9.   BENEFIT PLANS (Continued)
 

(a)

Includes ten corporate bonds due within ten years rated BBB- or better by the S&P.

(b)

Includes 65 companies spread over various market sectors.

The fair values of the Association’s pension plan assets at December 31, 2013, by asset category (see note 13 for the definition of levels) are as follows:

Asset Category	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Cash and money market funds	​	$	295,955	​	$	295,955	​	$	—	​	$	—
Corporate bonds(a)	​	​	669,098	​	​	—	​	​	669,098	​	​	—
Federal, state and local government bonds	​	​	—	​	​	—	​	​	—	​	​	—
Equity securities(b)	​	​	1,485,634	​	​	1,485,634	​	​	—	​	​	—
Total	​	$	2,450,687	​	$	1,781,589	​	$	669,098	​	$	—

(a)

Includes eleven corporate bonds due within ten years rated BBB- or better by the S&P.

(b)

Includes 70 companies spread over various market sectors.

Employee Savings Plan

The Company also maintains a defined contribution plan for eligible employees under Section 401(k) of the Internal Revenue Code. All employees who meet the plan eligibility requirements may elect to participate in the plan by making contributions up to the maximum permissible IRS limit. The Company makes matching contributions limited to 50% of the participant’s contributions up to 6% of compensation. Savings plan expense was approximately $26,000 and $26,400 for the years ended December 31, 2014 and 2013, respectively.

Employee Stock Ownership Plan

Effective upon completion of the Company’s initial public offering in July 2013, the Association established an Employee Stock Ownership Plan (“ESOP”) for all eligible employees who complete a twelve-month period of employment with the Association, have attained the age of 21 and complete at least 1,000 hours of service in a plan year. The ESOP used $555,450 in proceeds from a term loan obtained from the Company to purchase 55,545 shares of Company common stock. The remaining term loan principal is payable over 25 equal annual installments through December 31, 2037. The interest rate on the term loan is the prime rate. Each year, the Association intends to make discretionary contributions to the ESOP, which will be equal to principal and interest payments required on the term loan. The Association may substitute dividends paid, if any, on the Company common stock held by the ESOP for discretionary contributions.

Shares purchased with the loan proceeds provide collateral for the term loan and are held in a suspense account for future allocations among participants. Contributions to the ESOP and shares released from the suspense account are to be allocated among the participants on the basis of compensation, as described by the ESOP, in the year of allocation.

ESOP shares pledged as collateral were initially recorded as unearned ESOP shares in the consolidated statements of financial condition. Thereafter, on a monthly basis, 185 shares are committed to be released, compensation expense is recorded equal to the number of shares committed to be released times the monthly average market price of the shares, and the committed shares become outstanding for basic net income per common share computations. ESOP compensation expense was approximately $21,400, and $22,200 for the years ended December 31, 2014 and 2013, respectively.

F-26

 

 

9.   BENEFIT PLANS (Continued)
 

The ESOP shares were as follows:

​	December 31,
​	2014			2013
Allocated shares	​	​	2,221	​	​	—
Shares committed to be released	​	​	2,221	​	​	2,221
Unearned shares	​	​	51,103	​	​	53,324
Total ESOP shares	​	​	55,545	​	​	55,545
Fair value of unearned shares	​	$	506,431	​	$	504,000

Equity Incentive Plan

On July 17, 2014, the Board of Directors adopted the Sunnyside Bancorp, Inc. 2014 Equity Incentive Plan (the “Stock Incentive Plan”) which was approved by shareholders at the Company’s 2014 Annual Meeting of Shareholders held on September 16, 2014. Stock options and restricted stock may be granted to directors, officers and other employees of the Company. The maximum number of shares which may be issued upon exercise of the options under the plan cannot exceed 79,350 shares. The maximum number of shares of stock that may be issued as restricted stock awards cannot exceed 23,805.

No awards have been granted under the Stock Incentive Plan, and therefore, no compensation expense was recognized through December 31, 2014.

Other Retirement Benefits

Effective June 2002, the Company entered into salary continuation agreements with certain of its officers. The agreements provide for specified benefit payments for life, 15-year period certain commencing at normal retirement, as well as payments upon early retirement, disability and death. The amounts payable under the agreements vest at an annual rate of 5% over 20 years and are computed as a specified percentage of a defined total compensation base, less (i) benefits under the Company’s pension plan, 401(k) plan and deferred compensation agreements, and (ii) a portion of social security benefits. The Association also entered into agreements providing for split-dollar life insurance death benefits based on each officer’s total compensation, as defined. The salary continuation and split-dollar agreements are unfunded, non-qualified benefits plans. However, the Company has purchased life insurance policies held by a Rabbi Trust in consideration of its obligations under the salary continuation agreements and certain prior deferred compensation agreements. During 2009, certain of these obligations were renegotiated by the Company with the purchase of annuity contracts. At December 31, 2014 and 2013, recorded obligations of  $415,316 and $431,251, respectively, are included in other liabilities with respect to these agreements. The related life insurance policies are reported as assets at their cash surrender values of  $2,073,455 and $2,008,494 at December 31, 2014 and 2013, respectively. Total expense (credit) under these plans was approximately $(1,400) and $(24,100) for the years ended December 31, 2014 and 2013, respectively.

10.   ACCUMULATED OTHER COMPREHENSIVE LOSS

The components of accumulated other comprehensive loss included in stockholders’ equity are as follows:

​	December 31,
​	2014			2013
Unrealized net loss on pension plan	​	$	(1,340,386)	​	$	(1,204,899)
Unrealized loss on securities available for sale	​	​	(12,594)	​	​	(896,035)
Accumulated other comprehensive loss before taxes	​	​	(1,352,980)	​	​	(2,100,934)
Tax effect	​	​	537,076	​	​	833,982
Accumulated other comprehensive loss	​	$	(815,904)	​	$	(1,266,952)

F-27

 

 

11.   COMMITMENTS AND CONTINGENCIES

Off-Balance Sheet Financial Instruments

The Company is a party to certain financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These financial instruments are limited to agreements to extend credit that involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in the balance sheets. The contract or notional amounts of these instruments reflect the extent of the Association’s involvement in particular classes of financial instruments. The Company’s maximum exposure to credit loss in the event of nonperformance by the other parties to these instruments represents the contract amounts, assuming that they are fully funded at a later date and any collateral proves to be worthless.

The Company had loan origination commitments of  $2,750,000 and $1,242,000 at December 31, 2014 and 2013, respectively. Of the commitments at December 31, 2014, loans totaling $250,000 were fixed rate with interest rates ranging from 3.25% to 4.5% and $2,500,000 was a variable rate loan at prime plus 2.75%. In addition, the Company has outstanding undisbursed home equity and other lines of credit totaling $387,000 and $381,000 at December 31, 2014 and 2013, respectively. These are contractual agreements to lend to customers within specified time periods at interest rates and on other terms based on existing market conditions.

Commitments generally have fixed expiration dates or other termination clauses and may require the payment of a fee by the customer. The commitment amounts do not necessarily represent future cash requirements since certain agreements may expire without being funded. The credit risk associated with these instruments is essentially the same as for outstanding loans reported in the balance sheets. Commitments are subject to the same credit approval process, including a case-by-case evaluation of the customer’s creditworthiness and related collateral requirements.

At December 31, 2014, the Company has a $2.0 million unsecured line of credit with Atlantic Central Bankers Bank which has no balance outstanding.

Legal Proceedings

The Company is not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business. At December 31, 2014, the Company is not involved in any legal proceedings, the outcome of which would be material to the financial statements.

12.   REGULATORY CAPITAL

The Association is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possible additional discretionary, actions by regulators, that if undertaken could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Association must meet specific capital guidelines that involve quantitative measures of the Association’s assets, liabilities, and certain off-balance-sheet items, as calculated under regulatory accounting practices. Capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Association to maintain minimum amounts and ratios of tangible and core capital (as defined in the regulations) to total assets and of total risk-based capital (as defined) to risk-weighted assets (as defined). As of December 31, 2014 and 2013 the Association was well capitalized as defined in the regulatory framework for prompt corrective action. There were no conditions or events since December 31, 2014 that management believes have changed the Association’s capital ratings.

F-28

 

 

12.   REGULATORY CAPITAL (Continued)
 

The following table presents a reconciliation of the Association’s capital per GAAP and regulatory capital at the dates indicated (in thousands):

​	December 31,
​	2014			2013
GAAP capital	​	$	11,475	​	$	11,210
Add (subtract): Disallowed deferred tax assets	​	​	(207)	​	​	(252)
Unrealized loss on securities available for sale	​	​	8	​	​	540
Adjustment to record funded status of pension	​	​	808	​	​	727
Core and tangible capital	​	​	12,084	​	​	12,225
Add: Allowable allowance for loan losses	​	​	396	​	​	340
Total risk-based capital	​	$	12,480	​	$	12,565

The following is a summary of the Association’s actual capital amounts and ratios compared to the amounts and ratios required for minimum capital adequacy and for classification as a well-capitalized institution:

​

Actual

Minimum Capital Requirements

To be Well Capitalized Under Prompt Corrective Action Provisions

​

Amount

Ratio

Amount

Ratio

Amount

Ratio

​

(Dollars in Thousands)

December 31, 2014

​

​

​

​

​

​

Tangible Capital

​

$

12,084

​

12.81%

​

$

1,415

​

1.50%

​

$

N/A

​

—

Tier 1 (core) Capital

​

​

12,084

​

12.81%

​

​

3,774

​

4.00%

​

​

4,718

​

5.00%

Risk-based Capital:

​

​

​

​

​

​

Tier 1

​

​

12,084

​

30.50%

​

​

1,585

​

4.00%

​

​

2,378

​

6.00%

Total

​

​

12,480

​

31.49%

​

​

3,170

​

8.00%

​

​

3,963

​

10.00%

December 31, 2013

​

​

​

​

​

​

Tangible Capital

​

$

12,225

​

13.25%

​

$

1,384

​

1.50%

​

$

N/A

​

—

Tier 1 (core) Capital

​

​

12,225

​

13.25%

​

​

3,691

​

4.00%

​

​

4,613

​

5.00%

Risk-based Capital:

​

​

​

​

​

​

Tier 1

​

​

12,225

​

35.19%

​

​

1,390

​

4.00%

​

​

2,085

​

6.00%

Total

​

​

12,565

​

36.17%

​

​

2,779

​

8.00%

​

​

3,474

​

10.00%

13.   FAIR VALUE MEASUREMENTS AND DISCLOSURES

A.   Fair Value Measurements

The Accounting Standards Codification (“ASC”) Topic 820, “Fair Value Measurements and Disclosures,” defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC Topic 820 applies only to fair value measurements already required or permitted by other accounting standards and does not impose requirements for additional fair value measures. ASC Topic 820 was issued to increase consistency and comparability in reporting fair values.

The Company uses fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. The Company did not have any liabilities that were measured at fair value at December 31, 2014 and 2013. Securities available-for-sale are recorded at fair value on a recurring basis.

F-29

 

 

13.   FAIR VALUE MEASUREMENTS AND DISCLOSURES (Continued)
 

Additionally, from time to time, the Company may be required to record at fair value other assets or liabilities on a non-recurring basis, such as foreclosed real estate owned and certain impaired loans. These non-recurring fair value adjustments generally involve the write-down of individual assets due to impairment losses.

In accordance with ASC Topic 820, the Company groups its assets at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value. These levels are:

•

Level 1 — Valuation is based upon quoted prices for identical instruments traded in active markets.

•

Level 2 — Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market.

•

Level 3 — Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect the Company’s own estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include the use of option pricing models, discounted cash flow models and similar techniques. The results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability.

The Company bases its fair values on the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. ASC Topic 820 requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Assets that are measured on a recurring basis are limited to the available-for-sale securities portfolio. The available-for-sale portfolio is carried at estimated fair value with any unrealized gains and losses, net of taxes, reported as accumulated other comprehensive income or loss in stockholders’ equity. Substantially all of the available-for-sale portfolio consists of investment securities issued by government-sponsored enterprises. The fair values for substantially all of these securities are obtained from an independent securities broker. Based on the nature of the securities, the securities broker provides the Company with prices which are categorized as Level 2 since quoted prices in active markets for identical assets are generally not available for the majority of securities in the portfolio.

The following table provides the level of valuation assumptions used to determine the carrying value of assets measured at fair value on a recurring basis at December 31, 2014 and 2013:

Description

Value

(Level 1)

(Level 2)

(Level 3)

December 31, 2014:

​

​

​

​

Securities available for sale

​

$

34,511,669

​

$

—

​

$

34,511,669

​

$

—

December 31, 2013:

​

​

​

​

Securities available for sale

​

$

38,240,458

​

$

—

​

$

38,240,458

​

$

—

There were no assets measured at fair value on a non-recurring basis at December 31, 2014 and 2013.

B.   Fair Value Disclosures

The following methods and assumptions were used by the Company in estimating fair values of financial instruments as disclosed herein.

Cash and Cash Equivalents

For cash and due from banks and federal funds sold, the carrying amount approximates the fair value (Level 1).

F-30

 

 

13.   FAIR VALUE MEASUREMENTS AND DISCLOSURES (Continued)
 

Securities

The fair value of securities is estimated based on bid quotations received from securities dealers, if available (Level 1). If a quoted market price was not available, fair value was estimated using quoted market prices of similar instruments, adjusted for differences between the quoted instruments and the instruments being valued (Level 2).

FHLB and other stock, at cost

The fair value for FHLB and other stock, at cost is its carrying value, since this is the amount for which it could be redeemed. There is no active market for this stock, and the Company is required to maintain a minimum balance based upon the unpaid principal of home mortgage loans (Level 2).

Loans Receivable

Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type such as residential mortgage, commercial, and consumer. Each loan category is further segmented into fixed and adjustable rate interest terms and by performing and nonperforming categories (Level 3).

Deposits

The fair value of deposits with no stated maturity, such as non-interest-bearing demand deposits, savings, and NOW and money market accounts, is equal to the amount payable on demand (Level 1). The fair value of certificates of deposit is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits with similar remaining maturities (Level 2).

Short-Term Borrowings

The carrying amounts of federal funds purchased, and other short-term borrowings maturing within 90 days approximate their fair values. Fair values of other short-term borrowings are estimated using discounted cash flow analyses based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements (Level 1).

Long-Term Borrowings

The fair value of long-term borrowings is estimated using discounted cash flow analysis based on the current incremental borrowing rates for similar types of borrowing arrangements (Level 2).

Off-Balance-Sheet Instruments

In the ordinary course of business the Company has entered into off-balance-sheet financial instruments consisting of commitments to extend credit. Such financial instruments are recorded in the financial statements when they are funded. Their fair value would approximate fees currently charged to enter into similar agreements. For further information on these financial instruments, see Note 11.

F-31

 

 

13.   FAIR VALUE MEASUREMENTS AND DISCLOSURES (Continued)
 

The carrying values and estimated fair values of financial instruments are as follows (in thousands):

​

December 31,

​

2014

2013

​

Carrying Value

Estimated Fair Value

Carrying Value

Estimated Fair Value

​

(In Thousands)

Financial assets:

​

​

​

​

Cash and cash equivalents

​

$

3,720

​

$

3,720

​

$

2,637

​

$

2,637

Securities held to maturity

​

​

6,154

​

​

6,378

​

​

4,667

​

​

4,809

Securities available for sale

​

​

34,512

​

​

34,512

​

​

38,240

​

​

38,240

Loans receivable

​

​

43,220

​

​

44,097

​

​

40,040

​

​

40,180

FHLB and other stock, at cost

​

​

208

​

​

208

​

​

222

​

​

222

Accrued interest receivable

​

​

276

​

​

276

​

​

268

​

​

268

Financial liabilities:

​

​

​

​

Deposits

​

​

79,555

​

​

79,851

​

​

78,025

​

​

78,533

The fair value estimates are made at a discrete point in time based on relevant market information and information about the financial instruments. Fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Further, the foregoing estimates may not reflect the actual amount that could be realized if all or substantially all of the financial instruments were offered for sale.

In addition, the fair value estimates were based on existing on-and-off balance sheet financial instruments without attempting to value the anticipated future business and the value of assets and liabilities that are not considered financial instruments. Other significant assets and liabilities that are not considered financial assets and liabilities include premises and equipment and advances from borrowers for taxes and insurance. In addition, the tax ramifications related to the realization of the unrealized gains and losses have a significant effect on fair value estimates and have not been considered in any of the estimates.

Finally, reasonable comparability between financial institutions may not be likely due to the wide range of permitted valuation techniques and numerous estimates which must be made given the absence of active secondary markets for many of the financial instruments. The lack of uniform valuation methodologies introduces a greater degree of subjectivity to these estimated fair values.

F-32

Signatures

Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

​	Sunnyside Bancorp
Date: March 25, 2015	By:	/s/ Timothy D. Sullivan Timothy D. Sullivan President and Chief Executive Officer (Duly Authorized Representative)

Pursuant to the requirements of the Securities Exchange of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signatures	Title	Date
/s/ Timothy D. Sullivan	​	​
Timothy D. Sullivan	President, Chief Executive Officer and Director (Principal Executive Officer)	March 25, 2015
/s/ Edward J. Lipkus	​	​
Edward J. Lipkus	Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)	March 25, 2015
/s/ Gerardina Mirtuono	​	​
Gerardina Mirtuono	Senior Vice President, Chief Operating Officer and Director	March 25, 2015
/s/ William Boeckelman	​	​
William Boeckelman	Director	March 25, 2015
/s/ Lawrence P. Doyle	​	​
Lawrence P. Doyle	Director	March 25, 2015
/s/ Deborah J. Elliot	​	​
Deborah J. Elliot	Director	March 25, 2015
/s/ Desmond Lyons	​	​
Desmond Lyons	Director	March 25, 2015
/s/ Louis G. Ricci	​	​
Louis G. Ricci	Director	March 25, 2015

EXHIBIT INDEX

3.1	Articles of Incorporation of Sunnyside Bancorp*
3.2	Bylaws of Sunnyside Bancorp*
4	Form of Common Stock Certificate of Sunnyside Bancorp*
10.1	Form of Employment Agreement with Timothy D. Sullivan*
10.2	Form of Employment Agreement with Gerardina Mirtuono*
10.3	Form of Employee Stock Ownership Plan*
21	Subsidiaries
31.1	Certification required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following financial statements for the year ended December 31, 2014, formatted in XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income and Comprehensive Income, (iii) Consolidated Statements of Stockholders’ Equity, (iv) Consolidated Statements of Cash Flows, and (v) the Notes to Consolidated Financial Statements.

*

Incorporated by reference to the Registration Statement on Form S-1 (file no. 333-187317), initially filed March 15, 2013.

EX-21

Exhibit 21​

SUBSIDIARIES OF THE REGISTRANT

Subsidiary	Ownership	State of Incorporation
Sunnyside Federal Savings and Loan Association of Irvington	100%	Federal

EX-31.1

Exhibit 31.1​

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Timothy D. Sullivan, certify that:

1.

I have reviewed this annual report on Form 10-K of Sunnyside 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 15(d)-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 subsidiary, 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.

March 25, 2015 Date	/s/ Timothy D. Sullivan
	Timothy D. Sullivan President and Chief Executive Officer

EX-31.2

Exhibit 31.2​

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Edward J. Lipkus, certify that:

1.

I have reviewed this annual report on Form 10-K of Sunnyside Bancorp;

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 15(d)-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 subsidiary, 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.

March 25, 2015 Date	/s/ Edward J. Lipkus
	Edward J. Lipkus Vice President and Chief Financial Officer

EX-32

Exhibit 32​

Certification pursuant to
18 U.S.C. Section 1350,
as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

Timothy D. Sullivan, President and Chief Executive Officer and Edward J. Lipkus, Vice President and Chief Financial Officer of Sunnyside Bancorp, Inc. (the “Company”) each certify in their capacity as officers of the Company that they have reviewed the Annual Report of the Company on Form 10-K for the year ended December 31, 2014 and that to the best of their knowledge:

(1)

the Report fully complies with the requirements of Sections 13(a) of the Securities Exchange Act of 1934; and

(2)

the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company.

March 25, 2015 Date	/s/ Timothy D. Sullivan
	Timothy D. Sullivan President and Chief Executive Officer
March 25, 2015 Date	/s/ Edward J. Lipkus
	Edward J. Lipkus Vice President and Chief Financial Officer

XML

SECURITIES (Detail Textuals) (USD $)	12 Months Ended
	Dec. 31, 2014 Security	Dec. 31, 2013 Security
Schedule Of Available For Sale Securities [Line Items]
Proceeds from sales of securities available for sale	$ 1,877,730	$ 7,381,400
Net gains recognized on sales of securities available for sale	13,700	4,800
Proceeds from sales of securities held to maturity	230,771	2,764,870
Net gains recognized on sales of held to maturity securities	4,400	159,000
Percentage of principal outstanding collected due to prepayments on debt securities	85.00%
Number of securities in an unrealized loss position	19	33
Guaranteed By Ginnie Mae
Schedule Of Available For Sale Securities [Line Items]
Mortgage-backed securities	5,100,000	6,300,000
Guaranteed By Fannie Mae
Schedule Of Available For Sale Securities [Line Items]
Mortgage-backed securities	14,000,000	16,400,000
Guaranteed By Freddie Mac
Schedule Of Available For Sale Securities [Line Items]
Mortgage-backed securities	7,300,000	9,100,000
Guaranteed By Small Business Administration
Schedule Of Available For Sale Securities [Line Items]
Mortgage-backed securities	$ 5,500,000	$ 7,500,000

XML

INCOME TAXES - Components of income taxes (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Current tax expense (benefit):
Federal	$ (7,412)	$ 11,570
State	9,088	11,251
Current tax expense (benefit)	1,676	22,821
Deferred tax expense (benefit):
Federal	(142,187)	(91,373)
State	(36,990)	(22,466)
Deferred tax expense (benefit)	(179,177)	(113,839)
Actual income tax (benefit)	$ (177,501)	$ (91,018)

XML

PREMISES AND EQUIPMENT, NET (Detail Textuals) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Premises And Equipment, Net [Abstract]
Depreciation expense	$ 152,678	$ 134,259

XML

FAIR VALUE MEASUREMENTS AND DISCLOSURES - Assets measured at fair value on a recurring basis (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Fair Value Assets and Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Securities available for sale	$ 34,511,669	$ 38,240,458
(Level 1) | Recurring
Fair Value Assets and Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Securities available for sale
(Level 2) | Recurring
Fair Value Assets and Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Securities available for sale	34,511,669	38,240,458
(Level 3) | Recurring
Fair Value Assets and Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Securities available for sale

XML

INCOME TAXES - Reconciliation of expected income taxes (benefit) (Details 1) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Income Taxes [Abstract]
Federal income tax expense (benefit)	$ (131,875)	$ (51,287)
State income tax expense (benefit)	(18,415)	(7,402)
Income from life insurance	(23,881)	(22,583)
Tax-exempt interest	(5,972)	(9,693)
Other	2,642	(53)
Actual income tax (benefit)	$ (177,501)	$ (91,018)
Effective income tax rate	(45.76%)	(60.34%)

XML

LOANS RECEIVABLE, NET (Detail Textuals) (Loans Receivable, USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Loans Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unpaid principal balances of related party loans	$ 228,000	$ 260,000
Interest income on non-accrual loans	29,600	18,500
Amount of interest recognized on non-accrual loans	$ 15,700	$ 6,400

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Estimated useful lives (Details)	12 Months Ended
	Dec. 31, 2014
Building and building improvements | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives	5 years
Building and building improvements | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives	40 years
Furniture, fixtures and equipment | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives	2 years
Furniture, fixtures and equipment | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives	10 years

XML

INCOME TAXES (Detail Textuals) (USD $)	12 Months Ended
	Dec. 31, 2014
Income Taxes [Line Items]
Federal statutory rate	34.00%
Federal taxable income an allowance for bad debts based on percent of taxable income, percent	8.00%
Bad deductions	$ 1,700,000
Federal
Income Taxes [Line Items]
Net operating loss carryover	1,252,000
State
Income Taxes [Line Items]
Net operating loss carryover	$ 1,224,000

XML

FAIR VALUE MEASUREMENTS AND DISCLOSURES - Carrying values and estimated fair values of financial instruments (Details 1) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Carrying Value | Cash and cash equivalents
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Financial assets	$ 3,720	$ 2,637
Carrying Value | Securities held to maturity
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Financial assets	6,154	4,667
Carrying Value | Securities available for sale
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Financial assets	34,512	38,240
Carrying Value | Loans receivable
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Financial assets	43,220	40,040
Carrying Value | FHLB and other stock, at cost
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Financial assets	208	222
Carrying Value | Accrued interest receivable
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Financial assets	276	268
Carrying Value | Deposits
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Financial liabilities	79,555	78,025
Estimate Fair Value | Cash and cash equivalents
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Financial assets	3,720	2,637
Estimate Fair Value | Securities held to maturity
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Financial assets	6,378	4,809
Estimate Fair Value | Securities available for sale
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Financial assets	34,512	38,240
Estimate Fair Value | Loans receivable
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Financial assets	44,097	40,180
Estimate Fair Value | FHLB and other stock, at cost
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Financial assets	208	222
Estimate Fair Value | Accrued interest receivable
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Financial assets	276	268
Estimate Fair Value | Deposits
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Financial liabilities	$ 79,851	$ 78,533

XML

PREMISES AND EQUIPMENT, NET (Tables)

12 Months Ended

Dec. 31, 2014

Premises And Equipment, Net [Abstract]

Schedule of premises and equipments, net

​	December 31,
​	2014			2013
Land and land improvements	​	$	766,939	​	$	766,939
Building and building improvements	​	​	2,452,621	​	​	2,387,547
Furniture, fixtures and equipment	​	​	885,434	​	​	788,252
​	​	​	4,104,994	​	​	3,942,738
Less accumulated depreciation	​	​	(2,492,965)	​	​	(2,340,287)
​	​	$	1,612,029	​	$	1,602,451

XML

DEPOSITS (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Weighted Average Rate
Non-interest bearing checking	0.00%	0.00%
NOW accounts	0.05%	0.05%
Regular savings and clubs	0.10%	0.10%
Super saver	0.15%	0.15%
Money market	0.10%	0.10%
Certificates of deposit	1.04%	1.47%
Deposits, Weighted Average Rate	0.46%	0.72%
Amount
Non-interest bearing checking	$ 4,736,482	$ 3,575,695
NOW accounts	10,730,326	9,577,864
Regular savings and clubs	21,479,246	20,445,862
Super saver	7,443,330	8,491,734
Money market	3,464,679	3,339,699
Deposits, Gross	47,854,063	45,430,854
Certificates of deposit	31,701,353	32,593,750
Deposits, Total	$ 79,555,416	$ 78,024,604

XML

LOANS RECEIVABLE, NET - Credit quality indicators by portfolio segment and class (Details 2) (Loans Receivable, USD $)	Dec. 31, 2014	Dec. 31, 2013
Financing Receivable, Recorded Investment [Line Items]
Total	$ 43,570,195	$ 40,308,386
Pass
Financing Receivable, Recorded Investment [Line Items]
Total	42,684,000	39,300,000
Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total	454,000	639,000
Substandard
Financing Receivable, Recorded Investment [Line Items]
Total	432,000	369,000
Mortgage loans
Financing Receivable, Recorded Investment [Line Items]
Total	41,255,185	39,764,703
Mortgage loans | Residential 1-4 family
Financing Receivable, Recorded Investment [Line Items]
Total	31,457,055	33,526,400
Mortgage loans | Residential 1-4 family | Pass
Financing Receivable, Recorded Investment [Line Items]
Total	31,025,000	33,019,000
Mortgage loans | Residential 1-4 family | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total		138,000
Mortgage loans | Residential 1-4 family | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total	432,000	369,000
Mortgage loans | Commercial and multi-family
Financing Receivable, Recorded Investment [Line Items]
Total	9,428,335	5,548,498
Mortgage loans | Commercial and multi-family | Pass
Financing Receivable, Recorded Investment [Line Items]
Total	8,974,000	5,048,000
Mortgage loans | Commercial and multi-family | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total	454,000	501,000
Mortgage loans | Commercial and multi-family | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total
Mortgage loans | Home equity lines of credit
Financing Receivable, Recorded Investment [Line Items]
Total	369,795	689,805
Mortgage loans | Home equity lines of credit | Pass
Financing Receivable, Recorded Investment [Line Items]
Total	370,000	690,000
Mortgage loans | Home equity lines of credit | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total
Mortgage loans | Home equity lines of credit | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total
Commercial and other
Financing Receivable, Recorded Investment [Line Items]
Total	2,315,010	543,683
Commercial and other | Pass
Financing Receivable, Recorded Investment [Line Items]
Total	2,315,000	543,000
Commercial and other | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total
Commercial and other | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total

XML

SECURITIES - Amortized cost and fair value of securities by remaining period to contractual maturity (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Held to Maturity, Amortized Cost
Within one year
After one to five years	391,777	110,095
After five to ten years	79,829	379,471
After ten years	5,682,631	4,176,942
Held to Maturity, Amortized Cost	6,154,237	4,666,508
Held to Maturity, Fair Value
Within one year
After one to five years	394,383	116,846
After five to ten years	82,066	389,755
After ten years	5,901,060	4,302,233
Fair Value	6,378,000	4,809,000
Available for Sale, Amortized Cost
Within one year
After one to five years	3,997,344	574,576
After five to ten years	8,769,676	12,429,566
After ten years	21,757,243	26,132,352
Available for Sale, Amortized Cost	34,524,263	39,136,494
Available for Sale, Fair Value
Within one year
After one to five years	3,957,863	577,199
After five to ten years	8,803,062	12,191,416
After ten years	21,750,744	25,471,843
Available for Sale, Fair Value	$ 34,511,669	$ 38,240,458

XML

DEPOSITS - Interest expense on deposits (Details 2) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Deposits [Abstract]
NOW	$ 5,663	$ 5,033
Savings and clubs	31,955	33,579
Money market	3,426	3,397
Certificates of deposit	355,676	531,891
Interest Expense, Deposits, Total	$ 396,720	$ 573,900

XML

COMMITMENTS AND CONTINGENCIES (Detail Textuals) (USD $)

12 Months Ended

Dec. 31, 2014

Dec. 31, 2013

Loan origination commitments

Commitments And Contingencies [Line Items]

Financial liabilities

$ 2,750,000

$ 1,242,000

Fixed rate line of credit

250,000

Variable rate line of credit

2,500,000

Variable rate line of credit interest rate description

Prime plus 2.75%

Undisbursed home equity and other lines of credit

Commitments And Contingencies [Line Items]

Financial liabilities

387,000

381,000

Atlantic Central Bankers Bank

Commitments And Contingencies [Line Items]

Unsecured line of credit

$ 2,000,000

Minimum | Loan origination commitments

Commitments And Contingencies [Line Items]

Fixed rate line of credit interest rate

3.25%

Maximum | Loan origination commitments

Commitments And Contingencies [Line Items]

Fixed rate line of credit interest rate

4.50%

XML

BENEFIT PLANS - Weighted average assumptions used to determine net periodic plan cost (Details 3)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Benefit Plans [Abstract]
Discount rate	4.50%	5.50%
Expected rate of return on plan assets	8.00%	9.00%
Rate of compensation increase
Amortization period	13 years 3 months	14 years 3 months

XML

PREMISES AND EQUIPMENT, NET (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	$ 4,104,994	$ 3,942,738
Less accumulated depreciation	(2,492,965)	(2,340,287)
Premises and equipment, Net	1,612,029	1,602,451
Land and land improvements
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	766,939	766,939
Building and building improvements
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	2,452,621	2,387,547
Furniture, fixtures and equipment
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	$ 885,434	$ 788,252

XML

MUTUAL TO STOCK CONVERSION AND LIQUIDATION ACCOUNT

12 Months Ended

Dec. 31, 2014

Stockholders' Equity Note [Abstract]

MUTUAL TO STOCK CONVERSION AND LIQUIDATION ACCOUNT

2.   MUTUAL TO STOCK CONVERSION AND LIQUIDATION ACCOUNT

On July 15, 2013, the Association completed its mutual-to-stock conversion, and the Company consummated its initial stock offering. The Company sold 793,500 shares of its common stock, including 55,545 shares purchased by the Association’s employee stock ownership plan (“ESOP”), at a price of $10.00 per share, in a subscription offering, for gross offering proceeds of $7,935,000. The cost of conversion and the stock offering were deferred and deducted from the proceeds of the offering. Conversion costs incurred totaled $845,000 resulting in net proceeds of $6.5 million after also deducting the shares acquired by the ESOP.

In accordance with applicable federal conversion regulations, at the time of the completion of the mutual-to-stock conversion, the Company established a liquidation account in the Association in an amount equal to the Association’s total retained earnings as of the latest balance sheet date in the final prospectus used in the conversion.  Each eligible account holder or supplemental account holder is entitled to a proportionate share of this liquidation account in the event of a complete liquidation of the Association, and only in such event.  This share will be reduced if the eligible account holder’s or supplemental account holder’s deposit balance falls below the amounts on the date of record as of any December 31 and will cease to exist if the account is closed.  The liquidation account will never be increased despite any increase after conversion in the related deposit balance.

The Company may not declare, pay a dividend on, or repurchase any of its capital stock, if the effect thereof would cause retained earnings to be reduced below the liquidation account amount or regulatory capital requirements.

XML

BENEFIT PLANS - Estimated future benefit payments (Details 4) (USD $)	Dec. 31, 2014
Benefit Plans [Abstract]
2015	$ 183,307
2016	183,655
2017	187,562
2018	190,162
2019	199,672
Years 2020-2024	1,024,304
Total Estimated Future Benefit Payments	$ 1,968,662

XML

LOANS RECEIVABLE, NET - Summary of information about loan delinquencies (Details 3) (Loans Receivable, USD $)	Dec. 31, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
30 - 59 Days Past Due		$ 138,000
60 - 89 Days Past Due		198,000
90 Days or More Past Due	297,000	369,000
Total Past Due	297,000	705,000
Current Loans	43,273,000	39,603,000
Total loans	43,570,195	40,308,386
90 Days or More Past Due and Accruing
Mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	41,255,185	39,764,703
Other loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
30 - 59 Days Past Due
60 - 89 Days Past Due
90 Days or More Past Due
Total Past Due
Current Loans	2,315,000	543,000
Total loans	2,315,010	543,683
90 Days or More Past Due and Accruing
Residential 1-4 family | Mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
30 - 59 Days Past Due		138,000
60 - 89 Days Past Due
90 Days or More Past Due	297,000	369,000
Total Past Due	297,000	507,000
Current Loans	31,160,000	33,019,000
Total loans	31,457,055	33,526,400
90 Days or More Past Due and Accruing
Commercial and multi-family | Mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
30 - 59 Days Past Due
60 - 89 Days Past Due
90 Days or More Past Due
Total Past Due
Current Loans	9,428,000	5,549,000
Total loans	9,428,335	5,548,498
90 Days or More Past Due and Accruing
Home equity lines of credit | Mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
30 - 59 Days Past Due
60 - 89 Days Past Due		198,000
90 Days or More Past Due
Total Past Due		198,000
Current Loans	370,000	492,000
Total loans	369,795	689,805
90 Days or More Past Due and Accruing

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BENEFIT PLANS (Tables)

12 Months Ended

Dec. 31, 2014

Benefit Plans [Abstract]

Schedule of change in benefit obligation, change in plan assets, and a reconciliation of the funded status

​	December 31,
​	2014			2013
Change in projected benefit obligation:	​			​
Projected benefit obligation at beginning of year	​	$	2,499,163	​	$	2,278,426
Interest cost	​	​	104,214	​	​	116,099
Actuarial loss	​	​	146,862	​	​	272,169
Benefits paid	​	​	(198,582)	​	​	(167,531)
Projected benefit obligation at end of year	​	​	2,551,657	​	​	2,499,163
Change in fair value of plan assets:	​			​
Fair value of plan assets at beginning of year	​	​	2,450,687	​	​	1,852,575
Actual return on plan assets	​	​	128,964	​	​	339,792
Employer contributions	​	​	112,905	​	​	425,851
Benefits paid	​	​	(198,582)	​	​	(167,531)
Fair value of plan assets at end of year	​	​	2,493,974	​	​	2,450,687
Funded status of plan included in other liabilitites	​	$	(57,683)	​	$	(48,476)

Schedule of weighted average assumptions used to determine the Plan's benefit obligation

	December 31,
	2014			2013
Discount rate		4.50	%		4.50	%
Salary increase rate		N/A			N/A

Schedule of components of net periodic plan cost

	Year Ended
	December 31,
	2014			2013
Components of net periodic plan cost (credit):
Interest cost	$	104,214		$	116,099
Expected return on assets		(190,430	)		(189,981	)
Amortization of unrecognized loss		72,841			64,505
Net periodic plan cost (credit) included in compensation and benefits expense		(13,375	)		(9,377	)
Changes in benefit obligation recognized in other comprehensive (income) loss:
Net loss		208,328			122,358
Amortization of loss		(72,841	)		(64,505	)
Benefit obligation recognized in other comprehensive (income) loss		135,487			57,853
Total recognized in net periodic plan cost and other comprehensive (income) loss	$	122,112		$	48,476

Schedule of weighted average assumptions used to determine net periodic plan

	Year Ended
	December 31,
	2014			2013
Discount rate		4.50	%		5.50	%
Expected rate of return on plan assets		8.00	%		9.00	%
Rate of compensation increase		N/A			N/A
Amortization period		13.25			14.25

Schedule of benefit payments expected to be paid

Fiscal year ending December 31,	​	​
2015	$	183,307
2016	​	183,655
2017	​	187,562
2018	​	190,162
2019	​	199,672
Years 2020 – 2024	​	1,024,304
​	$	1,968,662

Schedule of fair values of the pension plan assets

The fair values of the pension plan assets at December 31, 2014, by asset category (see note 13 for the definition of levels) are as follows:

Asset Category	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Cash and money market funds	​	$	405,115	​	$	405,115	​	$	—	​	$	—
Corporate bonds(a)	​	​	606,331	​	​	—	​	​	606,331	​	​	—
Federal, state and local government bonds	​	​	—	​	​	—	​	​	—	​	​	—
Equity securities(b)	​	​	1,482,528	​	​	1,482,528	​	​	—	​	​	—
Total	​	$	2,493,974	​	$	1,887,643	​	$	606,331	​	$	—

(a)   Includes ten corporate bonds due within ten years rated BBB- or better by the S&P.

(b)   Includes 65 companies spread over various market sectors.

The fair values of the Association’s pension plan assets at December 31, 2013, by asset category (see note 13 for the definition of levels) are as follows:

Asset Category	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Cash and money market funds	​	$	295,955	​	$	295,955	​	$	—	​	$	—
Corporate bonds(a)	​	​	669,098	​	​	—	​	​	669,098	​	​	—
Federal, state and local government bonds	​	​	—	​	​	—	​	​	—	​	​	—
Equity securities(b)	​	​	1,485,634	​	​	1,485,634	​	​	—	​	​	—
Total	​	$	2,450,687	​	$	1,781,589	​	$	669,098	​	$	—

(a)   Includes eleven corporate bonds due within ten years rated BBB- or better by the S&P.

(b)   Includes 70 companies spread over various market sectors.

Schedule of ESOP shares

​	December 31,
​	2014			2013
Allocated shares	​	​	2,221	​	​	—
Shares committed to be released	​	​	2,221	​	​	2,221
Unearned shares	​	​	51,103	​	​	53,324
Total ESOP shares	​	​	55,545	​	​	55,545
Fair value of unearned shares	​	$	506,431	​	$	504,000

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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2014

Income Taxes [Abstract]

Schedule of components of income tax expense (benefit)

​	Year Ended December 31,
​	2014			2013
Current tax expense (benefit):	​			​
Federal	​	$	(7,412)	​	$	11,570
State	​	​	9,088	​	​	11,251
​	​	​	1,676	​	​	22,821
Deferred tax expense (benefit):	​			​
Federal	​	​	(142,187)	​	​	(91,373)
State	​	​	(36,990)	​	​	(22,466)
​	​	​	(179,177)	​	​	(113,839)
​	​	$	(177,501)	​	$	(91,018)

Schedule of reconciliation of effective income tax rate from the statutory federal rate

​	Year Ended December 31,
​	2014			2013
Federal income tax expense (benefit)	​	$	(131,875)	​	$	(51,287)
State income tax expense (benefit)	​	​	(18,415)	​	​	(7,402)
Income from life insurance	​	​	(23,881)	​	​	(22,583)
Tax-exempt interest	​	​	(5,972)	​	​	(9,693)
Other	​	​	2,642	​	​	(53)
Actual income tax (benefit)	​	$	(177,501)	​	$	(91,018)
Effective income tax rate	​	​	-45.76%	​	​	-60.34%

Schedule of deferred tax assets and liabilities

​	December 31,
​	2014			2013
Deferred tax assets:	​			​
Depreciation	​	$	86,409	​	$	78,281
Benefit plan liabilities	​	​	164,863	​	​	171,189
Allowance for loan losses	​	​	125,702	​	​	103,508
Charitable contribution carryover	​	​	1,129	​	​	991
Capital loss carryover	​	​	719,639	​	​	719,639
Net operating loss carryover	​	​	495,585	​	​	317,388
Unfunded pension liability	​	​	532,077	​	​	478,294
Unrealized loss on securities available for sale	​	​	4,999	​	​	355,688
Net deferred loan costs/fees	​	​	7,921	​	​	—
Other	​	​	9,702	​	​	—
​	​	​	2,148,026	​	​	2,224,978
Valuation allowance	​	​	(719,639)	​	​	(719,639)
Total deferred tax assets	​	​	1,428,387	​	​	1,505,339
Deferred tax liabilities:	​			​
Discounts on investments	​	​	591	​	​	333
Prepaid benefit plans	​	​	498,561	​	​	447,203
Net deferred loan costs/fees	​	​	—	​	​	10,180
Other	​	​	—	​	​	659
Total deferred tax liabilities	​	​	499,152	​	​	458,375
Net deferred tax assets	​	$	929,235	​	$	1,046,964

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INCOME TAXES - Components of deferred tax assets and liabilities (Details 2) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Deferred tax assets:
Depreciation	$ 86,409	$ 78,281
Benefit plan liabilities	164,863	171,189
Allowance for loan losses	125,702	103,508
Charitable contribution carryover	1,129	991
Capital loss carryover	719,639	719,639
Net operating loss carryover	495,585	317,388
Unfunded pension liability	532,077	478,294
Unrealized loss on securities available for sale	4,999	355,688
Net deferred loan costs/fees	7,921
Other	9,702
Deferred tax assets, Gross	2,148,026	2,224,978
Valuation allowance	(719,639)	(719,639)
Total deferred tax assets	1,428,387	1,505,339
Deferred tax liabilities:
Discounts on investments	591	333
Prepaid benefit plans	498,561	447,203
Net deferred loan costs/fees		10,180
Other		659
Total deferred tax liabilities	499,152	458,375
Net deferred tax assets	$ 929,235	$ 1,046,964

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LOANS RECEIVABLE, NET - Summary of loans, by loan type, on which the accrual of income has been discontinued and loans that are contractually past due 90 days or more (Details 4) (Loans Receivable, USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans	$ 432	$ 369
Accruing loans delinquent 90 days or more
Total non-performing loans	432	369
Other loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans
Accruing loans delinquent 90 days or more
Residential 1-4 family | Mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans	432	369
Accruing loans delinquent 90 days or more
Commercial and multi-family | Mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans
Accruing loans delinquent 90 days or more
Home equity lines of credit | Mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans
Accruing loans delinquent 90 days or more

XML

ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)

12 Months Ended

Dec. 31, 2014

Accumulated Other Comprehensive Loss [Abstract]

Schedule of components of accumulated other comprehensive loss

​	December 31,
​	2014			2013
Unrealized net loss on pension plan	​	$	(1,340,386)	​	$	(1,204,899)
Unrealized loss on securities available for sale	​	​	(12,594)	​	​	(896,035)
Accumulated other comprehensive loss before taxes	​	​	(1,352,980)	​	​	(2,100,934)
Tax effect	​	​	537,076	​	​	833,982
Accumulated other comprehensive loss	​	$	(815,904)	​	$	(1,266,952)

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REGULATORY CAPITAL (Tables)

12 Months Ended

Dec. 31, 2014

Regulatory Capital [Abstract]

Schedule of reconciliation of the association's capital per GAAP And regulatory capital

​	December 31,
​	2014			2013
GAAP capital	​	$	11,475	​	$	11,210
Add (subtract): Disallowed deferred tax assets	​	​	(207)	​	​	(252)
Unrealized loss on securities available for sale	​	​	8	​	​	540
Adjustment to record funded status of pension	​	​	808	​	​	727
Core and tangible capital	​	​	12,084	​	​	12,225
Add: Allowable allowance for loan losses	​	​	396	​	​	340
Total risk-based capital	​	$	12,480	​	$	12,565

Schedule of summary of actual capital amounts and ratios

​

Actual

Minimum Capital Requirements

To be Well Capitalized Under Prompt Corrective Action Provisions

​

Amount

Ratio

Amount

Ratio

Amount

Ratio

​

(Dollars in Thousands)

December 31, 2014

​

​

​

​

​

​

Tangible Capital

​

$

12,084

​

12.81%

​

$

1,415

​

1.50%

​

$

N/A

​

—

Tier 1 (core) Capital

​

​

12,084

​

12.81%

​

​

3,774

​

4.00%

​

​

4,718

​

5.00%

Risk-based Capital:

​

​

​

​

​

​

Tier 1

​

​

12,084

​

30.50%

​

​

1,585

​

4.00%

​

​

2,378

​

6.00%

Total

​

​

12,480

​

31.49%

​

​

3,170

​

8.00%

​

​

3,963

​

10.00%

December 31, 2013

​

​

​

​

​

​

Tangible Capital

​

$

12,225

​

13.25%

​

$

1,384

​

1.50%

​

$

N/A

​

—

Tier 1 (core) Capital

​

​

12,225

​

13.25%

​

​

3,691

​

4.00%

​

​

4,613

​

5.00%

Risk-based Capital:

​

​

​

​

​

​

Tier 1

​

​

12,225

​

35.19%

​

​

1,390

​

4.00%

​

​

2,085

​

6.00%

Total

​

​

12,565

​

36.17%

​

​

2,779

​

8.00%

​

​

3,474

​

10.00%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2014

Summary of Significant Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following is a description of the more significant policies used in the presentation of the accompanying consolidated financial statements of Sunnyside Bancorp, Inc. and Subsidiary (the “Company”).

Principles of Consolidation

The consolidated financial statements are comprised of the accounts of Sunnyside Bancorp. Inc., and its wholly-owned subsidiary, Sunnyside Federal Savings and Loan Association of Irvington (the “Association”). All significant intercompany accounts and transactions have been eliminated in consolidation.

Business

Sunnyside Federal Savings and Loan Association of Irvington is a community-oriented savings institution whose primary business is accepting deposits from customers within its market area (Westchester County, New York) and investing those funds in mortgage loans secured by one-to-four family residences and in mortgage-backed and other securities. To a significantly lesser extent, funds are invested in multi-family and commercial mortgage loans, commercial loans, and consumer loans. Customer deposits are insured up to applicable limits by the Federal Deposit Insurance Corporation (the “FDIC”). As a federally-chartered savings association, the Association’s primary regulator is the Office of the Controller of the Currency (the “OCC”).

Basis of Financial Statement Presentation

The financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statement of financial condition and revenues and expenses for the period then ended. Actual results could differ significantly from those estimates. 

A material estimate that is particularly susceptible to significant change relates to the determination of the allowance for loan losses. Management believes that the allowance for loan losses is adequate. While management uses available information to recognize losses on loans, future additions to the allowance for loan losses may be necessary based on changes in economic conditions in the Company’s market area.

In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses. Such agencies may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination.

Cash and Cash Equivalents

For purposes of reporting cash flows, the Company considers all cash and amounts due from depository institutions and interest-bearing deposits in other depository institutions with original maturities of three months or less to be cash equivalents.

Investment and Mortgage-Backed Securities

Securities that the Company has the positive intent and ability to hold to maturity are classified as held-to-maturity securities and reported at amortized cost. Securities classified as available-for-sale securities are reported at fair value, with unrealized holding gains or losses reported in a separate component of retained earnings. As of December 31, 2014 and 2013, the Company had no securities classified as held for trading.

The Company conducts a periodic review and evaluation of the securities portfolio to determine if a decline in the fair value of any security below its cost basis is other-than-temporary. The evaluation of other-than-temporary impairment considers the duration and severity of the impairment, the Company’s intent and ability to hold the securities and assessments of the reason for the decline in value and the likelihood of a near-term recovery. If such a decline is deemed other-than-temporary, the security is written down to a new cost basis and the resulting loss is charged to income as a component of non-interest expense.

Premiums and discounts on securities are amortized by use of the level-yield method, over the life of the individual securities. Gain or loss on sales of securities is based upon the specific identification method.

Loans Receivable

Loans receivable are stated at unpaid principal balances less the allowance for loan losses and net deferred loan fees.

Recognition of interest on the accrual method is generally discontinued when interest or principal payments are ninety days or more in arrears, or when other factors indicate that the collection of such amounts is doubtful. At that time, a loan is placed on a nonaccrual status, and all previously accrued and uncollected interest is reversed against interest income in the current period. Interest on such loans, if appropriate, is recognized as income when payments are received. A loan is returned to an accrual status when factors indicating doubtful collectibility no longer exist.

Allowance for Loan Losses

An allowance for loan losses is maintained at a level, to the best of management’s knowledge, to cover all known and inherent losses in the portfolio that are both probable and reasonable to estimate. Management of the Association, in determining the provision for loan losses considers the risks inherent in its loan portfolio and changes in the nature and volume of its loan activities, along with the general economic and real estate market conditions. The Company utilizes a two tier approach: (1) identification of problem loans and establishment of specific loss allowances on such loans; and (2) establishment of general valuation allowances on the remainder of its loan portfolio. The Company maintains a loan review system which allows for a periodic review of its loan portfolio and the early identification of potential problem loans. Such system takes into consideration, among other things, delinquency status, size of loans, type of collateral, and financial condition of the borrowers. Specific loan losses are established for identified loans based on a review of such information and appraisals of the underlying collateral. General loan losses are based upon a combination of factors including, but not limited to, actual loan loss experience, composition of the loan portfolio, current economic conditions, and management's judgment. Although management believes that adequate specific and general loan loss allowances are established, actual losses are dependent upon future events and, as such, further additions to the level of specific and general loan loss allowances may be necessary.

A loan evaluated for impairment is deemed to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. An insignificant payment delay, which is defined as up to ninety days by the Company, will not cause a loan to be classified as impaired. A loan is not impaired during a period of delay in payment if the Association expects to collect all amounts due, including interest accrued at the contractual interest rate for the period of delay. The amount of loan impairment is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or, as a practical expedient, at the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. All loans identified as impaired are evaluated independently. The Association does not aggregate such loans for evaluation purposes.

Federal Home Loan Bank of New York stock

As a member of the Federal Home Loan Bank of New York (“FHLB”), the Company is required to acquire and hold shares of FHLB Class B stock. The holding requirement varies based on the Company’s activities, primarily its outstanding borrowings, with the FHLB. The investment in FHLB stock is carried at cost. The Company conducts a periodic review and evaluation of its FHLB stock to determine if any impairment exists.

Premises and Equipment

Premises and equipment are comprised of land, building, and furniture, fixtures, and equipment, at cost, less accumulated depreciation. Depreciation charges are computed on the straight-line method over the following estimated useful lives:

Building and improvements	5 to 40 years
Furniture, fixtures and equipment	2 to 10 years

Bank-Owned Life Insurance

Bank-owned life insurance (“BOLI”) is accounted for in accordance with Financial Accounting Standards Board “FASB”) guidance. The cash surrender value of BOLI is recorded on the statement of financial condition as an asset and the change in the cash surrender value is recorded as non-interest income. The amount by which any death benefits received exceeds a policy’s cash surrender value is recorded in non-interest income at the time of receipt. A liability is also recorded on the statement of financial condition for postretirement death benefits provided by the split-dollar endorsement policy. A corresponding expense is recorded in non-interest expense for the accrual of benefits over the period during which employees provide services to earn the benefits.

Income Taxes

Federal and state income taxes have been provided on the basis of reported income. The amounts reflected on the tax return differ from these provisions due principally to temporary differences in the reporting of certain items for financial reporting and income tax reporting purposes. The tax effect of these temporary differences is accounted as deferred taxes applicable to future periods. Deferred income tax expense or benefit is determined by recognizing deferred tax assets and liabilities for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. The realization of deferred tax assets is assessed and a valuation allowance provided, when necessary, for that portion of the asset which is not likely to be realized.

The Company accounts for uncertainty in income taxes recognized in the financial statements in accordance with accounting guidance which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As a result of the Company’s evaluation, no significant income tax uncertainties have been identified. Therefore, the Company recognized no adjustment for unrecognized income tax benefits for the years ended December 31, 2014 and 2013. The Company’s policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense in the statement of income. The amount of interest and penalties for the years ended December 31, 2014 and 2013 was immaterial. The Company is subject to U.S. federal income tax, as well as income tax of the State of New York. The Company is no longer subject to examination by taxing authorities for years before 2010.

Employee Benefits

Defined Benefit Plans:

The accounting guidance related to retirement benefits requires an employer to: (a) recognize in its statement of financial position an asset for a plan’s overfunded status or a liability for a plan’s underfunded status; (b) measure a plan’s assets and its obligations that determine its funded status as of the end of the employer’s fiscal year; and (c) recognize, in comprehensive income, changes in the funded status of a defined benefit postretirement plan in the year in which the changes occur. The accounting guidance requires that plan assets and benefit obligations be measured as of the date of the employer’s fiscal year-end statement of financial condition.

401K Plan:

The Company has a 401(k) plan covering substantially all employees. The Company matches 50% of the first 6% contributed by participants and recognizes expense as its contributions are made.

Employee Stock Ownership Plan:

The employee stock ownership plan (ESOP) is accounted for in accordance with the provisions of ASC 718-40, “Employers’ Accounting for Employee Stock Ownership Plans.” The funds borrowed by the ESOP from the Company to purchase the Company’s common stock are being repaid from the Association’s contributions over a period of up to 25 years. The Company’s common stock not yet allocated to participants is recorded as a reduction of stockholders’ equity at cost. Compensation expense for the ESOP is based on the market price of the Company’s stock and is recognized as shares are committed to be released to participants.

Equity Incentive Plan:

On July 17, 2014, the Board of Directors adopted the Sunnyside Bancorp, Inc. 2014 Equity Incentive Plan (the “Stock Incentive Plan”) which was approved by shareholders at the Company’s 2014 Annual Meeting of Shareholders held on September 16, 2014. Stock options and restricted stock may be granted to directors, officers and other employees of the Company. The maximum number of shares which may be issued upon exercise of the options under the plan cannot exceed 79,350 shares. The maximum number of shares of stock that may be issued as restricted stock awards cannot exceed 23,805.

The Stock Incentive Plan will remain in effect as long as any awards under it are outstanding; however, no awards may be granted under the Stock Incentive Plan on or after the 10-year anniversary of the effective date of the Stock Incentive Plan or July 17, 2024.

Under FASB ASC Topic 718, the Company will recognize compensation expense on its income statement over the requisite service period or performance period based on the grant date fair value of stock options and other equity-based compensation (such as restricted stock). No awards have been granted under the 2014 Stock Incentive Plan and therefore, no compensation expense was recognized through December 31, 2014.

Comprehensive Income

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, and the actuarial gains and losses of the pension plan, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income.

Concentration of Credit Risk and Interest-Rate Risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, investment and mortgage-backed securities and loans. Cash and cash equivalents include amounts placed with highly rated financial institutions. Investment securities include securities backed by the U.S. Government and other highly rated instruments. The Company’s lending activity is primarily concentrated in loans collateralized by real estate in the State of New York. As a result, credit risk is broadly dependent on the real estate market and general economic conditions in the state.

The Company is principally engaged in the business of attracting deposits from the general public and using these deposits, together with borrowings and other funds, to make loans secured by real estate in the State of New York. The potential for interest-rate risk exists as a result of the shorter duration of interest-sensitive liabilities compared to the generally longer duration of interest-sensitive assets. In a rising rate environment, liabilities will reprice faster than assets, thereby reducing net interest income. For this reason, management regularly monitors the maturity structure of the Company's assets and liabilities in order to measure its level of interest-rate risk and to plan for future volatility.

Earnings Per Share

Basic earnings per common share, or EPS, are computed by dividing net income by the weighted-average common shares outstanding during the year. The weighted-average common shares outstanding includes the weighted-average number of shares of common stock outstanding less the weighted average number of unallocated shares held by the ESOP. For EPS calculations, ESOP shares that have been committed to be released are considered outstanding. ESOP shares that have not been committed to be released are excluded from outstanding shares on a weighted average basis for EPS calculations.

Earnings per share are not applicable for periods prior to the date of conversion, July 15, 2013.

Reclassifications

Certain amounts in the 2013 financial statements have been reclassified in order to conform to the 2014 presentation.

Advertising Costs

It is the Company’s policy to expense advertising costs in the period in which they are incurred.

Subsequent Events

The Company has evaluated all events subsequent to the balance sheet date of December 31, 2014, through the date of this report, and has determined that there are no subsequent events that require disclosure under FASB guidance.

Recent Accounting Pronouncements

In January 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-04, “Receivables — Troubled Debt Restructurings by Creditors (Subtopic 310-40) Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure,” which applies to all creditors who obtain physical possession of residential real estate property collateralizing a consumer mortgage loan in satisfaction of a receivable. The amendments in this update clarify when an in substance repossession or foreclosure occurs and requires disclosure of both (1) the amount of foreclosed residential real estate property held by a creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments in ASU 2014-04 are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2014. Early adoption is permitted and entities can elect to adopt a modified retrospective transition method or a prospective transition method. The adoption of this guidance should not have a material impact on the Company’s financial condition or results of operations.

In June 2014, the FASB issued ASU 2014-12, “Compensation — Stock Compensation (Topic 718)”. The amendments in this ASU require a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The performance target should not be reflected in estimating the grant-date fair value of the award, and compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The amendments in this ASU are effective for annual periods beginning after December 15, 2015. The adoption of this guidance should not have a material impact on the Company’s financial condition or results of operations.

In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” This update is intended to provide guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Management is required under the new guidance to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued when preparing financial statements for each interim and annual reporting period. If conditions or events are identified, the ASU specifies the process that must be followed by management and also clarifies the timing and content of going concern footnote disclosures in order to reduce diversity in practice. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2016. Early adoption is permitted. The adoption of this guidance should not have a material impact on the Company’s financial condition or results of operations.

In January 2015, the FASB issued ASU 2015-01, “Income Statement — Extraordinary and Unusual Items (Subtopic 225-20)”. This ASU eliminates extraordinary items from US GAAP and will align more closely with International Accounting Standards 1, “Presentation of Financial Statements”. The amendments in this ASU are effective beginning after December 15, 2015. The adoption of this guidance should not have a material impact on the Company’s financial condition or results of operations.

In February 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810)”. This ASU focuses on the consolidation evaluation for reporting organizations that are required to evaluate consolidation of certain legal entities by reducing the number of consolidation models from four to two and is intended to improve current GAAP. The amendments in this ASU are effective beginning after December 15, 2016. The adoption of this guidance should not have a material impact on the Company’s financial condition or results of operations.

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FAIR VALUE MEASUREMENTS AND DISCLOSURES (Tables)

12 Months Ended

Dec. 31, 2014

Fair Value Measurements And Disclosures [Abstract]

Schedule of assets measured at fair value on recurring basis

Description

Value

(Level 1)

(Level 2)

(Level 3)

December 31, 2014:

​

​

​

​

Securities available for sale

​

$

34,511,669

​

$

—

​

$

34,511,669

​

$

—

December 31, 2013:

​

​

​

​

Securities available for sale

​

$

38,240,458

​

$

—

​

$

38,240,458

​

$

—

Schedule of estimated fair values of financial instruments

​

December 31,

​

2014

2013

​

Carrying Value

Estimated Fair Value

Carrying Value

Estimated Fair Value

​

(In Thousands)

Financial assets:

​

​

​

​

Cash and cash equivalents

​

$

3,720

​

$

3,720

​

$

2,637

​

$

2,637

Securities held to maturity

​

​

6,154

​

​

6,378

​

​

4,667

​

​

4,809

Securities available for sale

​

​

34,512

​

​

34,512

​

​

38,240

​

​

38,240

Loans receivable

​

​

43,220

​

​

44,097

​

​

40,040

​

​

40,180

FHLB and other stock, at cost

​

​

208

​

​

208

​

​

222

​

​

222

Accrued interest receivable

​

​

276

​

​

276

​

​

268

​

​

268

Financial liabilities:

​

​

​

​

Deposits

​

​

79,555

​

​

79,851

​

​

78,025

​

​

78,533

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LOANS RECEIVABLE, NET - Loans receivable, net (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Less: Allowance for loan losses	$ 396,000	$ 340,000
Total loans, net	43,219,661	40,040,109
Loans Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	43,570,195	40,308,386
Less: Deferred loan fees (costs), net	(45,521)	(71,868)
Less: Allowance for loan losses	396,055	340,145	314,490
Total loan after deduction of deferred loan fees (costs), net and allowance for loan losses	350,534	268,277
Total loans, net	43,219,661	40,040,109
Loans Receivable | Mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	41,255,185	39,764,703
Loans Receivable | Other loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	2,315,010	543,683
Less: Allowance for loan losses	32,000	5,000	4,000
Loans Receivable | Residential 1-4 family | Mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	31,457,055	33,526,400
Less: Allowance for loan losses	258,000	295,000	128,000
Loans Receivable | Commercial and multi-family | Mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	9,428,335	5,548,498
Less: Allowance for loan losses	91,000	34,000	59,000
Loans Receivable | Home equity lines of credit | Mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	369,795	689,805
Less: Allowance for loan losses	3,000	6,000	5,000
Loans Receivable | Secured by savings accounts | Other loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	32,371	43,683
Loans Receivable | Student | Other loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	126,688
Loans Receivable | Commercial | Other loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	$ 2,155,951	$ 500,000

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DEPOSITS (Detail Textuals) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Deposits [Abstract]
Certificates of deposits of $100,000 or more	$ 11,600,000	$ 13,800,000
Maximum deposit insurance amount	$ 250,000

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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (USD $)	Dec. 31, 2014	Dec. 31, 2013
Assets
Cash and cash equivalents	$ 3,719,882	$ 2,636,523
Securities held to maturity, net; approximate fair value of $6,378,000 (2014) and $4,809,000 (2013)	6,154,237	4,666,508
Securities available for sale	34,511,669	38,240,458
Loans receivable, net	43,219,661	40,040,109
Premises and equipment, net	1,612,029	1,602,451
Federal Home Loan Bank of New York and other stock, at cost	207,820	222,420
Accrued interest receivable	275,571	267,796
Cash surrender value of life insurance	2,073,455	2,008,494
Deferred income taxes	929,235	1,046,964
Other assets	449,821	519,277
Total assets	93,153,380	91,251,000
Liabilities:
Deposits	79,555,416	78,024,604
Advances from borrowers for taxes and insurance	731,757	693,183
Other liabilities	668,090	597,210
Total liabilities	80,955,263	79,314,997
Commitments and contingencies
Stockholders' equity:
Serial preferred stock; par value $.01, 1,000,000 shares authorized, no shares issued
Common stock; par value $.01, 30,000,000 shares authorized and 793,500 shares issued	7,935	7,935
Additional paid-in capital	7,081,577	7,082,343
Unallocated common stock held by the Employee Stock Ownership Plan	(511,030)	(533,229)
Retained earnings	6,435,539	6,645,906
Accumulated other comprehensive (loss)	(815,904)	(1,266,952)
Total stockholders' equity	12,198,117	11,936,003
Total liabilities and stockholders' equity	$ 93,153,380	$ 91,251,000

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LOANS RECEIVABLE, NET - Activity in the allowance for loan losses by loan type (Details 5) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at beginning of year	$ 340,000
Provision for loan losses	55,910	24,500
Balance at end of year	396,000	340,000
Loans Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at beginning of year	340,145	314,490
Provision for loan losses	55,910	24,500
Recoveries		1,155
Balance at end of year	396,055	340,145
Loans Receivable | Mortgage loans | Residential 1-4 family
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at beginning of year	295,000	128,000
Provision for loan losses	(37,000)	167,000
Recoveries
Balance at end of year	258,000	295,000
Loans Receivable | Mortgage loans | Commercial and multi-family
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at beginning of year	34,000	59,000
Provision for loan losses	57,000	(25,000)
Recoveries
Balance at end of year	91,000	34,000
Loans Receivable | Mortgage loans | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at beginning of year	6,000	5,000
Provision for loan losses	(3,000)	1,000
Recoveries
Balance at end of year	3,000	6,000
Loans Receivable | Other loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at beginning of year	5,000	4,000
Provision for loan losses	27,000
Recoveries		1,000
Balance at end of year	32,000	5,000
Loans Receivable | Unallocated
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at beginning of year		118,000
Provision for loan losses	12,000	(118,000)
Recoveries
Balance at end of year	$ 12,000

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (USD $)	Common Stock	Additional Paid-in Capital	Unallocated Common Stock Held by ESOP	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Total
Balance at Dec. 31, 2012				$ 6,705,732	$ (491,727)	$ 6,214,005
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock at conversion	7,935	7,082,343				7,090,278
Acquisition of ESOP shares			(555,450)			(555,450)
Net Loss				(59,826)		(59,826)
ESOP shares allocated or committed to be released			22,221			22,221
Other comprehensive income (loss), net of tax					(775,225)	(775,225)
Balance at Dec. 31, 2013	7,935	7,082,343	(533,229)	6,645,906	(1,266,952)	11,936,003
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Loss				(210,367)		(210,367)
ESOP shares allocated or committed to be released		(766)	22,199			21,433
Other comprehensive income (loss), net of tax					451,048	451,048
Balance at Dec. 31, 2014	$ 7,935	$ 7,081,577	$ (511,030)	$ 6,435,539	$ (815,904)	$ 12,198,117

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BENEFIT PLANS - Weighted average assumptions used to determine the Plan's benefit obligation (Details 1)	Dec. 31, 2014	Dec. 31, 2013
Benefit Plans [Abstract]
Discount rate	4.50%	4.50%
Salary increase rate

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MUTUAL TO STOCK CONVERSION AND LIQUIDATION ACCOUNT (Detail Textuals) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Stockholders' Equity Note [Abstract]
Shares of common stock sold	793,500	793,500
Shares purchased by ESOP	55,545
ESOP purchase price per share	$ 10.00
Gross offering proceeds	$ 7,935,000
Conversion costs	845,000
Net proceeds after deducting shares acquired by ESOP	$ 6,500,000

XML

BENEFIT PLANS (Detail Textuals) (USD $)

12 Months Ended

Dec. 31, 2014

Installment

Dec. 31, 2013

Defined Benefit Plan Disclosure [Line Items]

Accumulated other comprehensive loss before taxes

$ (1,352,980)

$ (2,100,934)

Net periodic benefit cost in 2015

81,903

Expected rate of return on plan assets

8.00%

9.00%

Long-term inflation rate

3.00%

Defined benefit plan expected cash contribution

113,000

Percent of employee salary matched at 50%

6.00%

Percent match of employees 6% contribution

50.00%

Description of eligibility requirement

Eligible employees who complete a twelve-month period of employment with the Association, have attained the age of 21 and complete at least 1,000 hours of service in a plan year.

Defined contribution plan expense

26,000

26,400

Number of equal annual installment

25

Value of shares purchased by ESOP

(555,450)

Shares purchased by ESOP

55,545

Number of shares committed-to be released

185

ESOP compensation expense

21,400

22,200

Defined benefit plan benefit period

15 years

Annual vesting percent

5.00%

Vesting period

20 years

Recorded obligations

415,316

431,251

Cash surrender value of life insurance

2,073,455

2,008,494

Stock option | 2014 Stock Incentive Plan

Defined Benefit Plan Disclosure [Line Items]

Maximum number of shares which may be issued

79,350

Restricted stock | 2014 Stock Incentive Plan

Defined Benefit Plan Disclosure [Line Items]

Maximum number of shares which may be issued

23,805

Other Pension Plans Defined Benefit

Defined Benefit Plan Disclosure [Line Items]

Defined contribution plan expense

(1,400)

(24,100)

Corporate bonds

Defined Benefit Plan Disclosure [Line Items]

Defined benefit plan target allocation, percent

40.00%

Number of corporate bonds

10

11

Debt instrument term

10 years

10 years

Equity Securities

Defined Benefit Plan Disclosure [Line Items]

Defined benefit plan target allocation, percent

60.00%

Number of companies used

65

70

Minimum

Defined Benefit Plan Disclosure [Line Items]

Expected rate of return on plan assets

4.00%

Minimum | Equity Securities

Defined Benefit Plan Disclosure [Line Items]

Defined benefit plan target allocation, percent

30.00%

Defined benefit plan number of securities held

50

Defined benefit plan percent of net assets

5.00%

Expected rate of return on plan assets

5.00%

Minimum | Fixed Income Securities

Defined Benefit Plan Disclosure [Line Items]

Defined benefit plan target allocation, percent

20.00%

Expected rate of return on plan assets

2.00%

Maximum

Defined Benefit Plan Disclosure [Line Items]

Defined benefit plan percent of net assets in companies incorporated in foreign countries

15.00%

Expected rate of return on plan assets

8.00%

Maximum | Cash and money market funds

Defined Benefit Plan Disclosure [Line Items]

Defined benefit plan target allocation, percent

20.00%

Maximum | Equity Securities

Defined Benefit Plan Disclosure [Line Items]

Defined benefit plan target allocation, percent

80.00%

Defined benefit plan number of securities held

90

Expected rate of return on plan assets

9.00%

Maximum | Fixed Income Securities

Defined Benefit Plan Disclosure [Line Items]

Defined benefit plan target allocation, percent

60.00%

Expected rate of return on plan assets

6.00%

Unrealized net loss on pension plan

Defined Benefit Plan Disclosure [Line Items]

Accumulated other comprehensive loss before taxes

$ (1,340,386)

$ (1,204,899)

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2014

Summary of Significant Accounting Policies [Abstract]

Schedule of estimated useful lives of premises and equipment

Building and improvements	5 to 40 years
Furniture, fixtures and equipment	2 to 10 years

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SECURITIES - Held to maturity and available for sale securities (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Securities held to maturity:
Amortized Cost	$ 6,154,237	$ 4,666,508
Gross Unrealized Gains	225,695	142,326
Gross Unrealized Losses	2,423
Fair Value	6,378,000	4,809,000
Securities available for sale:
Amortized Cost	34,524,263	39,136,494
Gross Unrealized Gains	231,121	100,428
Gross Unrealized Losses	243,715	996,464
Fair Value	34,511,669	38,240,458
U.S.government and agency obligations
Securities held to maturity:
Amortized Cost	2,000,000
Gross Unrealized Gains	76,654
Gross Unrealized Losses
Fair Value	2,076,654
Securities available for sale:
Amortized Cost	5,997,345	3,996,781
Gross Unrealized Gains	2,025
Gross Unrealized Losses	58,756	225,048
Fair Value	5,940,614	3,771,733
State, county, and municipal obligations
Securities held to maturity:
Amortized Cost	817,280	489,566
Gross Unrealized Gains	10,234	17,035
Gross Unrealized Losses	2,423
Fair Value	825,091	506,601
Mortgage-backed securities
Securities held to maturity:
Amortized Cost	3,336,957	4,176,942
Gross Unrealized Gains	138,807	125,291
Gross Unrealized Losses
Fair Value	3,475,764	4,302,233
Securities available for sale:
Amortized Cost	28,526,918	35,139,713
Gross Unrealized Gains	229,096	100,428
Gross Unrealized Losses	184,959	771,416
Fair Value	$ 28,571,055	$ 34,468,725

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LOANS RECEIVABLE, NET (Tables)

12 Months Ended

Dec. 31, 2014

Receivables [Abstract]

Schedule of loans receivable, net

​	December 31,
​	2014			2013
Mortgage loans:	​			​
Residential 1 – 4 family	​	$	31,457,055	​	$	33,526,400
Commercial and multi-family	​	​	9,428,335	​	​	5,548,498
Home equity lines of credit	​	​	369,795	​	​	689,805
​	​	​	41,255,185	​	​	39,764,703
Other loans:	​			​
Secured by savings accounts	​	​	32,371	​	​	43,683
Student	​	​	126,688	​	​	—
Commercial	​	​	2,155,951	​	​	500,000
​	​	​	2,315,010	​	​	543,683
Total loans	​	​	43,570,195	​	​	40,308,386
Less:	​			​
Deferred loan fees (costs), net	​	​	(45,521)	​	​	(71,868)
Allowance for loan losses	​	​	396,055	​	​	340,145
​	​	​	350,534	​	​	268,277
​	​	$	43,219,661	​	$	40,040,109

Schedule of activity in allowance for loan losses

​	Year Ended December 31,
​	2014			2013
Balance at beginning of year	​	$	340,145	​	$	314,490
Provision for loan losses	​	​	55,910	​	​	24,500
Charge offs	​	​	—	​	​	—
Recoveries	​	​	—	​	​	1,155
Balance at end of year	​	$	396,055	​	$	340,145

Schedule of credit quality indicators by portfolio segment

​

December 31, 2014

​

Mortgage Loans

Commercial and Other

Total

​

Residential 1 – 4 Family

Commercial Real Estate and Multi-Family

Home Equity

​

(In thousands)

Pass

​

$

31,025

​

$

8,974

​

$

370

​

$

2,315

​

$

42,684

Special Mention

​

​

—

​

​

454

​

​

—

​

​

—

​

​

454

Substandard

​

​

432

​

​

—

​

​

—

​

​

—

​

​

432

Total

​

$

31,457

​

$

9,428

​

$

370

​

$

2,315

​

$

43,570

​

December 31, 2013

​

Mortgage Loans

Commercial and Other

Total

​

Residential 1 – 4 Family

Commercial and Multi-Family

Home Equity

​

(In thousands)

Pass

​

$

33,019

​

$

5,048

​

$

690

​

$

543

​

$

39,300

Special Mention

​

​

138

​

​

501

​

​

—

​

​

—

​

​

639

Substandard

​

​

369

​

​

—

​

​

—

​

​

—

​

​

369

Total

​

$

33,526

​

$

5,549

​

$

690

​

$

543

​

$

40,308

Schedule of information about loan delinquencies

​	December 31, 2014
​	30 – 59 Days Past Due			60 – 89 Days Past Due			90 Days or More Past Due			Total Past Due			Current Loans			Total Loans			90 Days or More Past Due and Accruing
​	(In thousands)
Residential 1 – 4 family	​	$	—	​	$	—	​	$	297	​	$	297	​	$	31,160	​	$	31,457	​	$	—
Commercial and multi-family	​	​	—	​	​	—	​	​	—	​	​	—	​	​	9,428	​	​	9,428	​	​	—
Home equity lines of credit	​	​	—	​	​	—	​	​	—	​	​	—	​	​	370	​	​	370	​	​	—
Other loans	​	​	—	​	​	—	​	​	—	​	​	—	​	​	2,315	​	​	2,315	​	​	—
​	​	$	—	​	$	—	​	$	297	​	$	297	​	$	43,273	​	$	43,570	​	$	—

​	December 31, 2013
​	30 – 59 Days Past Due			60 – 89 Days Past Due			90 Days or More Past Due			Total Past Due			Current Loans			Total Loans			90 Days or More Past Due and Accruing
​	(In thousands)
Residential 1 – 4 family	​	$	138	​	$	—	​	$	369	​	$	507	​	$	33,019	​	$	33,526	​	$	—
Commercial and multi-family	​	​	—	​	​	—	​	​	—	​	​	—	​	​	5,549	​	​	5,549	​	​	—
Home equity lines of credit	​	​	—	​	​	198	​	​	—	​	​	198	​	​	492	​	​	690	​	​	—
Other loans	​	​	—	​	​	—	​	​	—	​	​	—	​	​	543	​	​	543	​	​	—
​	​	$	138	​	$	198	​	$	369	​	$	705	​	$	39,603	​	$	40,308	​	$	—

Schedule of summary of loans on which accrual of income has been discontinued and loans past due but not classified as non-accrual

​	December 31,
​	2014			2013
​	(In thousands)
Residential 1 – 4 family	​	$	432	​	$	369
Commercial and multi-family	​	​	—	​	​	—
Home equity lines of credit	​	​	—	​	​	—
Other loans	​	​	—	​	​	—
Total non-accrual loans	​	​	432	​	​	369
Accruing loans delinquent 90 days or more	​	​	—	​	​	—
Total non-performing loans	​	$	432	​	$	369

Schedule of activity in allowance for loan losses by loan type

​	Year Ended December 31, 2014
​	Mortgage Loans									Other			Unallocated			Total
​	Residential 1 – 4 Family			Commercial and Multi-Family			Home Equity
​	(In thousands)
Beginning balance	​	$	295	​	$	34	​	$	6	​	$	5	​	$	—	​	$	340
Provision for loan losses	​	​	(37)	​	​	57	​	​	(3)	​	​	27	​	​	12	​	​	56
Ending Balance	​	$	258	​	$	91	​	$	3	​	$	32	​	$	12	​	$	396

​	Year Ended December 31, 2013
​	Mortgage Loans									Other			Unallocated			Total
​	Residential 1 – 4 Family			Commercial and Multi-Family			Home Equity
​	(In thousands)
Beginning balance	​	$	128	​	$	59	​	$	5	​	$	4	​	$	118	​	$	314
Provision for loan losses	​	​	167	​	​	(25)	​	​	1	​	​	—	​	​	(118)	​	​	25
Recoveries	​	​	—	​	​	—	​	​	—	​	​	1	​	​	—	​	​	1
Ending Balance	​	$	295	​	$	34	​	$	6	​	$	5	​	$	—	​	$	340

XML

REGULATORY CAPITAL - Reconciliation of the Association's capital per GAAP and regulatory capital (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Regulatory Capital [Abstract]
GAAP capital	$ 11,475	$ 11,210
Add (subtract): Disallowed deferred tax assets	207	(252)
Unrealized loss on securities available for sale	8	540
Adjustment to record funded status of pension	808	727
Core and tangible capital	12,084	12,225
Add: Allowable allowance for loan losses	396	340
Total risk-based capital	$ 12,480	$ 12,565

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Cash flows from operating activities:
Net (loss)	$ (210,367)	$ (59,826)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation expense	152,678	134,259
Amortization of premiums and accretion of discounts, net	199,279	300,128
Amortization of deferred loan fees and costs, net	19,942	(3,731)
Provision for loan losses	55,910	24,500
Net gain on sales of securities	(18,078)	(163,959)
(Increase) decrease in accrued interest receivable	(7,775)	12,403
Increase in cash surrender value of life insurance	(64,961)	(63,560)
Net (increase) decrease in other assets	(109,721)	218,564
Net decrease in other liabilities	(64,607)	(409,528)
Amortization of ESOP shares	21,433	22,221
Net cash (used in) provided by operating activities	(26,267)	11,471
Cash flows from investing activities:
Purchases of securities available for sale	(3,000,000)	(22,825,587)
Purchases of securities held to maturity	(2,552,844)
Repayments and maturities of securities held to maturity	838,155	2,755,081
Repayments and maturities of securities available for sale	5,549,488	9,052,074
Proceeds from sales of securities held to maturity	230,771	2,764,870
Proceeds from sales of securities available for sale	1,877,730	7,381,400
Redemption (purchase) of Federal Home Loan Bank and other stock	14,600	(21,300)
Loans purchased		(2,235,964)
Loan originations, net of principal repayments	(3,255,404)	2,080,404
Purchases of bank premises and equipment	(162,256)	(121,300)
Net cash used in investing activities	(459,760)	(1,170,322)
Cash flows from financing activities:
Net increase (decrease) in deposits	1,530,812	(8,161,073)
Net increase (decrease) in advances from borrowers for taxes and insurance	38,574	(12,853)
Net proceeds from stock conversion		6,534,828
Net cash provided by (used in) financing activities	1,569,386	(1,639,098)
Net increase (decrease) in cash and cash equivalents	1,083,359	(2,797,949)
Cash and cash equivalents at beginning of year	2,636,523	5,434,472
Cash and cash equivalents at end of year	3,719,882	2,636,523
Cash paid for:
Interest	396,287	573,935
Income taxes (refunds received), net	$ (36,966)	$ (9,895)

XML

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parentheticals) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Consolidated Statements Of Financial Condition [Abstract]
Securities held to maturity, fair value (in dollars)	$ 6,378,000	$ 4,809,000
Serial preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Serial preferred stock, shares authorized	1,000,000	1,000,000
Serial preferred stock, shares issued
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	30,000,000	30,000,000
Common stock, shares issued	793,500	793,500

XML

ACCUMULATED OTHER COMPREHENSIVE LOSS

12 Months Ended

Dec. 31, 2014

Accumulated Other Comprehensive Loss [Abstract]

ACCUMULATED OTHER COMPREHENSIVE LOSS

10.   ACCUMULATED OTHER COMPREHENSIVE LOSS

       The components of accumulated other comprehensive loss included in stockholders’ equity are as follows:

​	December 31,
​	2014			2013
Unrealized net loss on pension plan	​	$	(1,340,386)	​	$	(1,204,899)
Unrealized loss on securities available for sale	​	​	(12,594)	​	​	(896,035)
Accumulated other comprehensive loss before taxes	​	​	(1,352,980)	​	​	(2,100,934)
Tax effect	​	​	537,076	​	​	833,982
Accumulated other comprehensive loss	​	$	(815,904)	​	$	(1,266,952)

XML

Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2014	Mar. 25, 2015	Jun. 30, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	Sunnyside Bancorp, Inc.
Entity Central Index Key	0001571398
Trading Symbol	snny
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding		793,500
Entity Public Float			$ 6,674,103
Document Type	10-K
Document Period End Date	Dec. 31, 2014
Amendment Flag	false
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY

XML

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2014

Commitments And Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

11.   COMMITMENTS AND CONTINGENCIES

Off-Balance Sheet Financial Instruments

        The Company is a party to certain financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These financial instruments are limited to agreements to extend credit that involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in the balance sheets. The contract or notional amounts of these instruments reflect the extent of the Association’s involvement in particular classes of financial instruments. The Company’s maximum exposure to credit loss in the event of nonperformance by the other parties to these instruments represents the contract amounts, assuming that they are fully funded at a later date and any collateral proves to be worthless.

       The Company had loan origination commitments of $2,750,000 and $1,242,000 at December 31, 2014 and 2013, respectively. Of the commitments at December 31, 2014, loans totaling $250,000 were fixed rate with interest rates ranging from 3.25% to 4.5% and $2,500,000 was a variable rate loan at prime plus 2.75%. In addition, the Company has outstanding undisbursed home equity and other lines of credit totaling $387,000 and $381,000 at December 31, 2014 and 2013, respectively. These are contractual agreements to lend to customers within specified time periods at interest rates and on other terms based on existing market conditions.

       Commitments generally have fixed expiration dates or other termination clauses and may require the payment of a fee by the customer. The commitment amounts do not necessarily represent future cash requirements since certain agreements may expire without being funded. The credit risk associated with these instruments is essentially the same as for outstanding loans reported in the balance sheets. Commitments are subject to the same credit approval process, including a case-by-case evaluation of the customer’s creditworthiness and related collateral requirements.

       At December 31, 2014, the Company has a $2.0 million unsecured line of credit with Atlantic Central Bankers Bank which has no balance outstanding.

Legal Proceedings

      The Company is not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business. At December 31, 2014, the Company is not involved in any legal proceedings, the outcome of which would be material to the financial statements.

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Interest and dividend income:
Loans	$ 1,847,551	$ 1,932,161
Investment securities	170,171	121,214
Mortgage-backed securities	671,296	631,882
Federal funds sold and other earning assets	10,317	5,750
Total interest and dividend income	2,699,335	2,691,007
Interest expense:
Deposits	396,720	573,900
Borrowings	354	35
Total interest expense	397,074	573,935
Net interest income	2,302,261	2,117,072
Provision for loan losses	55,910	24,500
Net interest income after provision for loan losses	2,246,351	2,092,572
Non-interest income:
Fees and service charges	92,114	99,488
Net gain on sale of securities	18,078	163,959
Income on bank owned life insurance	64,961	63,560
Total non-interest income	175,153	327,007
Non-interest expense:
Compensation and benefits	1,342,714	1,307,729
Occupancy and equipment, net	399,737	386,404
Data processing service fees	204,205	165,566
Professional fees	471,329	338,085
Federal deposit insurance premiums	63,639	61,703
Advertising and promotion	101,578	75,928
Other	226,170	235,008
Total non-interest expense	2,809,372	2,570,423
(Loss) before income taxes	(387,868)	(150,844)
Income tax (benefit)	(177,501)	(91,018)
Net (loss)	$ (210,367)	$ (59,826)
Basic and diluted loss per share (in dollars per share)	$ (0.28)
Weighted average shares outstanding basic and diluted (in shares)	741,383	342,159

XML

PREMISES AND EQUIPMENT, NET

12 Months Ended

Dec. 31, 2014

Premises And Equipment, Net [Abstract]

PREMISES AND EQUIPMENT, NET

5.   PREMISES AND EQUIPMENT, NET

​	December 31,
​	2014			2013
Land and land improvements	​	$	766,939	​	$	766,939
Building and building improvements	​	​	2,452,621	​	​	2,387,547
Furniture, fixtures and equipment	​	​	885,434	​	​	788,252
​	​	​	4,104,994	​	​	3,942,738
Less accumulated depreciation	​	​	(2,492,965)	​	​	(2,340,287)
​	​	$	1,612,029	​	$	1,602,451

Depreciation expense for the years ended, December 31, 2014 and 2013, was $152,678 and $134,259, respectively.

XML

LOANS RECEIVABLE, NET

12 Months Ended

Dec. 31, 2014

Receivables [Abstract]

LOANS RECEIVABLE, NET

4.   LOANS RECEIVABLE, NET

​	December 31,
​	2014			2013
Mortgage loans:	​			​
Residential 1 – 4 family	​	$	31,457,055	​	$	33,526,400
Commercial and multi-family	​	​	9,428,335	​	​	5,548,498
Home equity lines of credit	​	​	369,795	​	​	689,805
​	​	​	41,255,185	​	​	39,764,703
Other loans:	​			​
Secured by savings accounts	​	​	32,371	​	​	43,683
Student	​	​	126,688	​	​	—
Commercial	​	​	2,155,951	​	​	500,000
​	​	​	2,315,010	​	​	543,683
Total loans	​	​	43,570,195	​	​	40,308,386
Less:	​			​
Deferred loan fees (costs), net	​	​	(45,521)	​	​	(71,868)
Allowance for loan losses	​	​	396,055	​	​	340,145
​	​	​	350,534	​	​	268,277
​	​	$	43,219,661	​	$	40,040,109

In the ordinary course of business, the Company makes loans to its directors, executive officers, and their associates (related parties) on the same terms as those prevailing at the time of origination for comparable loans with other borrowers. The unpaid principal balances of related party loans were approximately $228,000 and $260,000 at December 31, 2014 and 2013, respectively.

Activity in the allowance for loan losses is summarized as follows:

​	Year Ended December 31,
​	2014			2013
Balance at beginning of year	​	$	340,145	​	$	314,490
Provision for loan losses	​	​	55,910	​	​	24,500
Charge offs	​	​	—	​	​	—
Recoveries	​	​	—	​	​	1,155
Balance at end of year	​	$	396,055	​	$	340,145

The allowance for loan losses consists of specific, general and unallocated components. The specific component relates to loans that are classified as impaired. For loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. There are no specific allowances as of December 31, 2014 and 2013. The general component covers pools of loans by loan class not considered impaired, as well as smaller balance homogeneous loans, such as one-to-four family real estate, home equity lines of credit and other consumer loans.  These pools of loans are evaluated for loss exposure based upon historical loss rates for each of these categories of loans, adjusted for qualitative factors.  These qualitative risk factors include:

1. Lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices.

2. National, regional, and local economic and business conditions including the value of underlying collateral for collateral dependent loans.

3. Nature and volume of the portfolio and terms of loans.

4. Experience, ability, and depth of lending management and staff and the quality of the Association’s loan review system.

5. Volume and severity of past due, classified and nonaccrual loans.

6. Existence and effect of any concentrations of credit and changes in the level of such concentrations.

7. Effect of external factors, such as competition and legal and regulatory requirements.

Each factor is assigned a value to reflect improving, stable or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation. Adjustments to the factors are supported through documentation of changes in conditions in a narrative accompanying the allowance for loan loss calculation.

An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio.

The allowance calculation methodology includes further segregation of loan classes into risk rating categories. The borrower’s overall financial condition, repayment sources, guarantors and value of collateral, if appropriate, are evaluated when credit deficiencies arise, such as delinquent loan payments. Credit quality risk ratings include regulatory classifications of pass, special mention, substandard, doubtful and loss.

Loan classifications are defined as follows:

• Pass — These loans are well protected by the current net worth and paying capacity of the obligor (or guarantors, if any) or by the fair value, less cost to acquire and sell, of any underlying collateral in a timely manner.

• Special Mention — These loans have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of repayment prospects.

• Substandard — These loans are inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged, if any. Assets so classified must have a well-defined weakness, or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

• Doubtful — These loans have all the weaknesses inherent in a loan classified substandard with the added characteristic that the weaknesses make the full recovery of our principal balance highly questionable and improbable on the basis of currently known facts, conditions, and values. The likelihood of a loss on an asset or portion of an asset classified as doubtful is high. Its classification as Loss is not appropriate, however, because pending events are expected to materially affect the amount of loss.

• Loss — These loans are considered uncollectible and of such little value that a charge-off is warranted. This classification does not necessarily mean that an asset has no recovery or salvage value; but rather, there is much doubt about whether, how much, or when the recovery will occur.

One of the primary methods the Company uses as an indicator of the credit quality of their portfolio is the regulatory classification system. The following table reflects the credit quality indicators by portfolio segment and class, at the dates indicated:

​

December 31, 2014

​

Mortgage Loans

Commercial and Other

Total

​

Residential 1 – 4 Family

Commercial Real Estate and Multi-Family

Home Equity

​

(In thousands)

Pass

​

$

31,025

​

$

8,974

​

$

370

​

$

2,315

​

$

42,684

Special Mention

​

​

—

​

​

454

​

​

—

​

​

—

​

​

454

Substandard

​

​

432

​

​

—

​

​

—

​

​

—

​

​

432

Total

​

$

31,457

​

$

9,428

​

$

370

​

$

2,315

​

$

43,570

​

December 31, 2013

​

Mortgage Loans

Commercial and Other

Total

​

Residential 1 – 4 Family

Commercial and Multi-Family

Home Equity

​

(In thousands)

Pass

​

$

33,019

​

$

5,048

​

$

690

​

$

543

​

$

39,300

Special Mention

​

​

138

​

​

501

​

​

—

​

​

—

​

​

639

Substandard

​

​

369

​

​

—

​

​

—

​

​

—

​

​

369

Total

​

$

33,526

​

$

5,549

​

$

690

​

$

543

​

$

40,308

The following table provides information about loan delinquencies at the dates indicated:

​	December 31, 2014
​	30 – 59 Days Past Due			60 – 89 Days Past Due			90 Days or More Past Due			Total Past Due			Current Loans			Total Loans			90 Days or More Past Due and Accruing
​	(In thousands)
Residential 1 – 4 family	​	$	—	​	$	—	​	$	297	​	$	297	​	$	31,160	​	$	31,457	​	$	—
Commercial and multi-family	​	​	—	​	​	—	​	​	—	​	​	—	​	​	9,428	​	​	9,428	​	​	—
Home equity lines of credit	​	​	—	​	​	—	​	​	—	​	​	—	​	​	370	​	​	370	​	​	—
Other loans	​	​	—	​	​	—	​	​	—	​	​	—	​	​	2,315	​	​	2,315	​	​	—
​	​	$	—	​	$	—	​	$	297	​	$	297	​	$	43,273	​	$	43,570	​	$	—

​	December 31, 2013
​	30 – 59 Days Past Due			60 – 89 Days Past Due			90 Days or More Past Due			Total Past Due			Current Loans			Total Loans			90 Days or More Past Due and Accruing
​	(In thousands)
Residential 1 – 4 family	​	$	138	​	$	—	​	$	369	​	$	507	​	$	33,019	​	$	33,526	​	$	—
Commercial and multi-family	​	​	—	​	​	—	​	​	—	​	​	—	​	​	5,549	​	​	5,549	​	​	—
Home equity lines of credit	​	​	—	​	​	198	​	​	—	​	​	198	​	​	492	​	​	690	​	​	—
Other loans	​	​	—	​	​	—	​	​	—	​	​	—	​	​	543	​	​	543	​	​	—
​	​	$	138	​	$	198	​	$	369	​	$	705	​	$	39,603	​	$	40,308	​	$	—

There were no impaired loans or troubled debt restructured loans at December 31, 2014 and 2013.

The following is a summary of loans, by loan type, on which the accrual of income has been discontinued and loans that are contractually past due 90 days or more but have not been classified as non-accrual at the dates indicated:

​	December 31,
​	2014			2013
​	(In thousands)
Residential 1 – 4 family	​	$	432	​	$	369
Commercial and multi-family	​	​	—	​	​	—
Home equity lines of credit	​	​	—	​	​	—
Other loans	​	​	—	​	​	—
Total non-accrual loans	​	​	432	​	​	369
Accruing loans delinquent 90 days or more	​	​	—	​	​	—
Total non-performing loans	​	$	432	​	$	369

The total amount of interest income on non-accrual loans that would have been recognized if interest on all such loans had been recorded based upon original contract terms amounted to approximately $29,600 and $18,500 for the year ended December 31, 2014 and 2013, respectively. The total amount of interest income recognized on non-accrual loans amounted to approximately $15,700 and $6,400 during the year ended December 31, 2014 and 2013, respectively.

The following tables present the activity in the allowance for loan losses by loan type for the years indicated:

​	Year Ended December 31, 2014
​	Mortgage Loans									Other			Unallocated			Total
​	Residential 1 – 4 Family			Commercial and Multi-Family			Home Equity
​	(In thousands)
Beginning balance	​	$	295	​	$	34	​	$	6	​	$	5	​	$	—	​	$	340
Provision for loan losses	​	​	(37)	​	​	57	​	​	(3)	​	​	27	​	​	12	​	​	56
Ending Balance	​	$	258	​	$	91	​	$	3	​	$	32	​	$	12	​	$	396

​	Year Ended December 31, 2013
​	Mortgage Loans									Other			Unallocated			Total
​	Residential 1 – 4 Family			Commercial and Multi-Family			Home Equity
​	(In thousands)
Beginning balance	​	$	128	​	$	59	​	$	5	​	$	4	​	$	118	​	$	314
Provision for loan losses	​	​	167	​	​	(25)	​	​	1	​	​	—	​	​	(118)	​	​	25
Recoveries	​	​	—	​	​	—	​	​	—	​	​	1	​	​	—	​	​	1
Ending Balance	​	$	295	​	$	34	​	$	6	​	$	5	​	$	—	​	$	340

XML

SECURITIES (Tables)

12 Months Ended

Dec. 31, 2014

Securities [Abstract]

Schedule of held to maturity and available for sale securities

​

December 31, 2014

​

Amortized Cost

Gross Unrealized

Fair Value

​

Gains

Losses

Securities held to maturity:

​

​

​

​

​

​

​

​

​

​

​

​

U.S. government and agency obligations

​

$

2,000,000

​

​$

76,654

​

$​

—

​

$​

2,076,654

State, county, and municipal obligations

​

817,280

​

10,234

​

2,423

​

825,091

Mortgage-backed securities

​

​

3,336,957

​

​

138,807

​

​

—

​

​

3,475,764

​

​

$

6,154,237

​

$

225,695

​

$

2,423

​

$

6,377,509

Securities available for sale:

​

​

​

​

​

​

​

​

​

​

​

​

U.S. government and agency obligations

​

$

5,997,345

​

$

2,025

​

$

58,756

​

$

5,940,614

Mortgage-backed securities

​

​

28,526,918

​

​

229,096

​

​

184,959

​

​

28,571,055

​

​

$

34,524,263

​

$

231,121

​

$

243,715

​

$

34,511,669

​

December 31, 2013

​

Amortized Cost

Gross Unrealized

Fair Value

​

Gains

Losses

Securities held to maturity:

​

​

​

​

​

​

​

​

​

​

​

​

State, county, and municipal obligations

​

$

489,566

​

$

17,035

​

$

—

​

$

506,601

Mortgage-backed securities

​

​

4,176,942

​

​

125,291

​

​

—

​

​

4,302,233

​

​

$

4,666,508

​

$

142,326

​

$

—

​

$

4,808,834

Securities available for sale:

​

​

​

​

​

​

​

​

​

​

​

​

U.S. government and agency obligations

​

$

3,996,781

​

$

—

​

$

225,048

​

$

3,771,733

Mortgage-backed securities

​

​

35,139,713

​

​

100,428

​

​

771,416

​

​

34,468,725

​

​

$

39,136,494

​

$

100,428

​

$

996,464

​

$

38,240,458

Schedule of amortized cost and fair value of securities by remaining period to contractual maturity

​

December 31, 2014

​

Held to Maturity

Available for Sale

​

Amortized Cost

Fair Value

Amortized Cost

Fair Value

Within one year

​

$

—

​

$

—

​

$

—

​

$

—

After one to five years

​

​

391,777

​

​

394,383

​

​

3,997,344

​

​

3,957,863

After five to ten years

​

​

79,829

​

​

82,066

​

​

8,769,676

​

​

8,803,062

After ten years

​

​

5,682,631

​

​

5,901,060

​

​

21,757,243

​

​

21,750,744

​

​

$

6,154,237

​

$

6,377,509

​

$

34,524,263

​

$

34,511,669

​

December 31, 2013

​

Held to Maturity

Available for Sale

​

Amortized Cost

Fair Value

Amortized Cost

Fair Value

Within one year

​

$

—

​

$

—

​

$

—

​

$

—

After one to five years

​

​

110,095

​

​

116,846

​

​

574,576

​

​

577,199

After five to ten years

​

​

379,471

​

​

389,755

​

​

12,429,566

​

​

12,191,416

After ten years

​

​

4,176,942

​

​

4,302,233

​

​

26,132,352

​

​

25,471,843

​

​

$

4,666,508

​

$

4,808,834

​

$

39,136,494

​

$

38,240,458

Schedule of fair values and unrealized losses of securities with an unrealized loss

​

December 31, 2014

​

Under One Year

One Year or More

​

Fair Value

Gross Unrealized Loss

Fair Value

Gross Unrealized Loss

Securities available for sale:

​

​

​

​

​

​

​

​

​

​

​

​

U.S. government and agency obligations

​

$

999,738

​

$

262

​

$

2,938,851

​

$

58,494

Mortgage-backed securities

​

​

5,573,324

​

​

21,827

​

​

6,116,841

​

​

163,131

​

​

​

6,573,062

​

​

22,089

​

​

9,055,692

​

​

221,625

Securities held to maturity:

​

​

​

​

​

​

​

​

​

​

​

​

State, county, and municipal obligations

​

​

204,584

​

​

2,423

​

​

—

​

​

—

​

​

$

6,777,646

​

$

24,512

​

$

9,055,692

​

$

221,625

​

December 31, 2013

​

Under One Year

One Year or More

​

Fair Value

Gross Unrealized Loss

Fair Value

Gross Unrealized Loss

Securities available for sale:

​

​

​

​

​

​

​

​

​

​

​

​

U.S. government and agency obligations

​

$

3,771,733

​

$

225,048

​

$

—

​

$

—

Mortgage-backed securities

​

​

20,801,105

​

​

447,844

​

​

3,941,749

​

​

323,572

​

​

$

24,572,838

​

$

672,892

​

$

3,941,749

​

$

323,572

XML

REGULATORY CAPITAL

12 Months Ended

Dec. 31, 2014

Regulatory Capital [Abstract]

REGULATORY CAPITAL

12.   REGULATORY CAPITAL

The Association is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possible additional discretionary, actions by regulators, that if undertaken could have a direct material effect on the Company's consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Association must meet specific capital guidelines that involve quantitative measures of the Association’s assets, liabilities, and certain off-balance-sheet items, as calculated under regulatory accounting practices. Capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Association to maintain minimum amounts and ratios of tangible and core capital (as defined in the regulations) to total assets and of total risk-based capital (as defined) to risk-weighted assets (as defined). As of December 31, 2014 and 2013 the Association was well capitalized as defined in the regulatory framework for prompt corrective action. There were no conditions or events since December 31, 2014 that management believes have changed the Association’s capital ratings.

The following table presents a reconciliation of the Association’s capital per GAAP and regulatory capital at the dates indicated (in thousands):

​	December 31,
​	2014			2013
GAAP capital	​	$	11,475	​	$	11,210
Add (subtract): Disallowed deferred tax assets	​	​	(207)	​	​	(252)
Unrealized loss on securities available for sale	​	​	8	​	​	540
Adjustment to record funded status of pension	​	​	808	​	​	727
Core and tangible capital	​	​	12,084	​	​	12,225
Add: Allowable allowance for loan losses	​	​	396	​	​	340
Total risk-based capital	​	$	12,480	​	$	12,565

The following is a summary of the Association’s actual capital amounts and ratios compared to the amounts and ratios required for minimum capital adequacy and for classification as a well-capitalized institution:

​

Actual

Minimum Capital Requirements

To be Well Capitalized Under Prompt Corrective Action Provisions

​

Amount

Ratio

Amount

Ratio

Amount

Ratio

​

(Dollars in Thousands)

December 31, 2014

​

​

​

​

​

​

Tangible Capital

​

$

12,084

​

12.81%

​

$

1,415

​

1.50%

​

$

N/A

​

—

Tier 1 (core) Capital

​

​

12,084

​

12.81%

​

​

3,774

​

4.00%

​

​

4,718

​

5.00%

Risk-based Capital:

​

​

​

​

​

​

Tier 1

​

​

12,084

​

30.50%

​

​

1,585

​

4.00%

​

​

2,378

​

6.00%

Total

​

​

12,480

​

31.49%

​

​

3,170

​

8.00%

​

​

3,963

​

10.00%

December 31, 2013

​

​

​

​

​

​

Tangible Capital

​

$

12,225

​

13.25%

​

$

1,384

​

1.50%

​

$

N/A

​

—

Tier 1 (core) Capital

​

​

12,225

​

13.25%

​

​

3,691

​

4.00%

​

​

4,613

​

5.00%

Risk-based Capital:

​

​

​

​

​

​

Tier 1

​

​

12,225

​

35.19%

​

​

1,390

​

4.00%

​

​

2,085

​

6.00%

Total

​

​

12,565

​

36.17%

​

​

2,779

​

8.00%

​

​

3,474

​

10.00%

XML

INCOME TAXES

12 Months Ended

Dec. 31, 2014

Income Taxes [Abstract]

INCOME TAXES

8.   INCOME TAXES

The components of income taxes are summarized as follows:

​	Year Ended December 31,
​	2014			2013
Current tax expense (benefit):	​			​
Federal	​	$	(7,412)	​	$	11,570
State	​	​	9,088	​	​	11,251
​	​	​	1,676	​	​	22,821
Deferred tax expense (benefit):	​			​
Federal	​	​	(142,187)	​	​	(91,373)
State	​	​	(36,990)	​	​	(22,466)
​	​	​	(179,177)	​	​	(113,839)
​	​	$	(177,501)	​	$	(91,018)

The following is a reconciliation of expected income taxes (benefit), computed at the applicable federal statutory rate of 34% to the actual income tax expense (benefit):

​	Year Ended December 31,
​	2014			2013
Federal income tax expense (benefit)	​	$	(131,875)	​	$	(51,287)
State income tax expense (benefit)	​	​	(18,415)	​	​	(7,402)
Income from life insurance	​	​	(23,881)	​	​	(22,583)
Tax-exempt interest	​	​	(5,972)	​	​	(9,693)
Other	​	​	2,642	​	​	(53)
Actual income tax (benefit)	​	$	(177,501)	​	$	(91,018)
Effective income tax rate	​	​	-45.76%	​	​	-60.34%

The components of deferred tax assets and liabilities are as follows:

​	December 31,
​	2014			2013
Deferred tax assets:	​			​
Depreciation	​	$	86,409	​	$	78,281
Benefit plan liabilities	​	​	164,863	​	​	171,189
Allowance for loan losses	​	​	125,702	​	​	103,508
Charitable contribution carryover	​	​	1,129	​	​	991
Capital loss carryover	​	​	719,639	​	​	719,639
Net operating loss carryover	​	​	495,585	​	​	317,388
Unfunded pension liability	​	​	532,077	​	​	478,294
Unrealized loss on securities available for sale	​	​	4,999	​	​	355,688
Net deferred loan costs/fees	​	​	7,921	​	​	—
Other	​	​	9,702	​	​	—
​	​	​	2,148,026	​	​	2,224,978
Valuation allowance	​	​	(719,639)	​	​	(719,639)
Total deferred tax assets	​	​	1,428,387	​	​	1,505,339
Deferred tax liabilities:	​			​
Discounts on investments	​	​	591	​	​	333
Prepaid benefit plans	​	​	498,561	​	​	447,203
Net deferred loan costs/fees	​	​	—	​	​	10,180
Other	​	​	—	​	​	659
Total deferred tax liabilities	​	​	499,152	​	​	458,375
Net deferred tax assets	​	$	929,235	​	$	1,046,964

At December 31, 2014, the Company had a federal net operating loss carryover of $1,252,000 and a New York state net operating loss carryover of $1,224,000 available to offset future taxable income.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Management believes that it is more likely than not that the tax benefits of certain future deductible temporary differences will be realized based on the reversal of existing temporary differences and future taxable income, and therefore, a valuation allowance has not been provided for these deferred tax assets. Additionally, management has determined that the realization of certain of the Association’s deferred tax assets related to the capital loss carryover is not more likely than not to be realized due to the fact that the loss can only be offset against capital gains, and as such, has provided a valuation allowance against those deferred tax assets at December 31, 2014 and 2013.

The Association qualifies as a savings and loan association under the provisions of the Internal Revenue Code and, therefore, was permitted, prior to January 1, 1996, to deduct from federal taxable income an allowance for bad debts based on eight percent of taxable income before such deduction less certain adjustments, subject to certain limitations. Beginning January 1, 1996, the Association, for federal income tax purposes, must calculate its bad debt deduction using either the experience or the specific charge off method. Retained earnings at December 31, 2014 included approximately $1,700,000 of such bad deductions for which income taxes have not been provided.

XML

BENEFIT PLANS - Components of net periodic plan cost (Details 2) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Components of net periodic plan cost (credit):
Interest cost	$ 104,214	$ 116,099
Expected return on assets	(190,430)	(189,981)
Amortization of unrecognized loss	72,841	64,505
Net periodic plan cost (credit) included in compensation and benefits expense	(13,375)	(9,377)
Changes in benefit obligation recognized in other comprehensive (income) loss:
Net loss	208,328	122,358
Amortization of loss	(72,841)	(64,505)
Benefit obligation recognized in other comprehensive (income) loss	135,487	57,853
Total recognized in net periodic plan cost and other comprehensive (income) loss	$ 122,112	$ 48,476

XML

ACCRUED INTEREST RECEIVABLE

12 Months Ended

Dec. 31, 2014

Accrued Interest Receivable [Abstract]

ACCRUED INTEREST RECEIVABLE

6.   ACCRUED INTEREST RECEIVABLE 

​	December 31,
​	2014			2013
Loans	​	$	137,154	​	$	140,967
Mortgage-backed securities	​	​	89,211	​	​	107,666
Investment securities	​	​	49,206	​	​	19,163
​	​	$	275,571	​	$	267,796

XML

DEPOSITS

12 Months Ended

Dec. 31, 2014

Deposits [Abstract]

DEPOSITS

7.   DEPOSITS

​	December 31,
​	2014					2013
​	Weighted Average Rate		Amount			Weighted Average Rate		Amount
Non-interest bearing checking	​	0.00%	​	$	4,736,482	​	0.00%	​	$	3,575,695
NOW accounts	​	0.05%	​	​	10,730,326	​	0.05%	​	​	9,577,864
Regular savings and clubs	​	0.10%	​	​	21,479,246	​	0.10%	​	​	20,445,862
Super saver	​	0.15%	​	​	7,443,330	​	0.15%	​	​	8,491,734
Money market	​	0.10%	​	​	3,464,679	​	0.10%	​	​	3,339,699
​	​	​	​	​	47,854,063	​	​	​	​	45,430,854
Certificates of deposit	​	1.04%	​	​	31,701,353	​	1.47%	​	​	32,593,750
​	​	0.46%	​	$	79,555,416	​	0.72%	​	$	78,024,604

Certificates of deposit are summarized by remaining period to contractual maturity as follows:

​	2014			2013
​	(In thousands)
One year or less	​	$	13,953	​	$	19,416
Over one to three years	​	​	15,532	​	​	9,239
Over three years	​	​	2,216	​	​	3,939
​	​	$	31,701	​	$	32,594

Certificates of deposit with balances of $100,000 or more totaled $11.6 million and $13.8 million at December 31, 2014 and 2013, respectively. The Company’s deposits are insurable to applicable limits established by the Federal Deposit Insurance Corporation. The maximum deposit insurance amount is $250,000.

Interest expense on deposits is summarized as follows:

​	Year Ended December 31,
​	2014			2013
NOW	​	$	5,663	​	$	5,033
Savings and clubs	​	​	31,955	​	​	33,579
Money market	​	​	3,426	​	​	3,397
Certificates of deposit	​	​	355,676	​	​	531,891
​	​	$	396,720	​	$	573,900

XML

BENEFIT PLANS

12 Months Ended

Dec. 31, 2014

Benefit Plans [Abstract]

BENEFIT PLANS

9.   BENEFIT PLANS

Pension Plan

All eligible Company employees are included in a non-contributory defined benefit pension plan. Effective April 15, 2008, the plan was “Frozen.” At the freeze date, no employee will be permitted to commence or recommence participation in the plan and no further benefits will accrue to any plan participants. In addition, compensation received on or after the plan freeze date will not be considered for any purpose under the plan.

The following table sets forth the change in benefit obligation, change in plan assets, and a reconciliation of the funded status: 

 

​	December 31,
​	2014			2013
Change in projected benefit obligation:	​			​
Projected benefit obligation at beginning of year	​	$	2,499,163	​	$	2,278,426
Interest cost	​	​	104,214	​	​	116,099
Actuarial loss	​	​	146,862	​	​	272,169
Benefits paid	​	​	(198,582)	​	​	(167,531)
Projected benefit obligation at end of year	​	​	2,551,657	​	​	2,499,163
Change in fair value of plan assets:	​			​
Fair value of plan assets at beginning of year	​	​	2,450,687	​	​	1,852,575
Actual return on plan assets	​	​	128,964	​	​	339,792
Employer contributions	​	​	112,905	​	​	425,851
Benefits paid	​	​	(198,582)	​	​	(167,531)
Fair value of plan assets at end of year	​	​	2,493,974	​	​	2,450,687
Funded status of plan included in other liabilitites	​	$	(57,683)	​	$	(48,476)

As of December 31, 2014 and 2013, the components of accumulated other comprehensive loss on a pretax basis are an unrecognized actuarial loss of $1,340,386 and $1,204,899, respectively.

The estimated net actuarial loss for the pension plan that will be amortized from accumulated other comprehensive loss into net periodic benefit cost during 2015 is $81,903.

The weighted average assumptions used to determine the Plan’s benefit obligation are as follows:

​	December 31,
​	2014		2013
Discount rate	​	4.50%	​	4.50%
Salary increase rate	​	N/A	​	N/A

The components of net periodic plan cost is as follows:

​	Year Ended December 31,
​	2014			2013
Components of net periodic plan cost (credit):	​			​
Interest cost	​	$	104,214	​	$	116,099
Expected return on assets	​	​	(190,430)	​	​	(189,981)
Amortization of unrecognized loss	​	​	72,841	​	​	64,505
Net periodic plan cost (credit) included in compensation and benefits expense	​	​	(13,375)	​	​	(9,377)
Changes in benefit obligation recognized in other comprehensive (income) loss:	​			​
Net loss	​	​	208,328	​	​	122,358
Amortization of loss	​	​	(72,841)	​	​	(64,505)
Benefit obligation recognized in other comprehensive (income) loss	​	​	135,487	​	​	57,853
Total recognized in net periodic plan cost and other comprehensive (income) loss	​	$	122,112	​	$	48,476

The weighted average assumptions used to determine net periodic plan cost are as follows:

	Year Ended
	December 31,
	2014			2013
Discount rate		4.50	%		5.50	%
Expected rate of return on plan assets		8.00	%		9.00	%
Rate of compensation increase		N/A			N/A
Amortization period		13.25			14.25

Investment Policies and Strategies

Wilmington Trust Retirement & Institutional Services Company acts as Trustee for the Plan. The Plan assets are managed by Pinnacle Associates, Ltd.

The long-term investment objectives are to maintain plan assets at a level that will sufficiently cover long-term obligations and to generate a return on plan assets that will meet or exceed the rate at which long-term obligations will grow. A broadly diversified combination of equity and fixed income portfolios and various risk management techniques are used to help achieve these objectives.

Allowable investments include common stocks, preferred stocks, fixed income securities, depository receipts, money market funds, real estate investment trusts, and publicly traded limited partnerships with the following limitations:

· The account will be a balanced account, with a target of 60% equity securities and 40% fixed income securities ratio which may vary based on the portfolio manager’s discretion.

· The account will generally not invest more than 20% of its net assets in cash and cash equivalents.

· The account will invest, under normal circumstances, between 20% to 60% of its net assets in fixed income securities.

· The account will invest, under normal circumstances, between 30% to 80% of its net assets in equity securities. The equities will be mostly of a large capitalization nature.

· The account will generally hold between 50 to 90 equity securities.

· The maximum equity position size will be limited to 5% of net assets at the time of purchase.

· For equities, each significant economic sector will be considered for the investment.

· The account may invest up to 15% of its net assets in companies incorporated outside of the United States, at the time of purchase.

· The account will not sell securities short. Any short transactions in futures, swaps, structured products, and call options will apply to this limit.

The investment goal is to achieve investment results that will contribute to the proper funding of the pension plan by exceeding the rate of inflation over the long term.

Determination of Long-Term Rate-of-Return

The long-term rate-of-return-on-assets assumption was set based on historical returns earned by equities and fixed income securities, adjusted to reflect expectations of future returns as applied to the plan’s target allocation of asset classes. Equities and fixed income securities were assumed to earn real rates of return on in the ranges of 5-9% and 2-6%, respectively. The long-term inflation rate was estimated to be 3%. When these overall return expectations are applied to the plan’s target allocation, the result is an expected rate of return of 4% to 8%.

Estimated Future Benefit Payments

The following benefit payments, which reflect expected future services, as appropriate, are expected to be paid:

Fiscal year ending December 31,	​	​
2015	$	183,307
2016	​	183,655
2017	​	187,562
2018	​	190,162
2019	​	199,672
Years 2020 – 2024	​	1,024,304
​	$	1,968,662

The Company expects to contribute cash of $113,000 to the plan in 2015.

The fair values of the pension plan assets at December 31, 2014, by asset category (see note 13 for the definition of levels) are as follows:

Asset Category	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Cash and money market funds	​	$	405,115	​	$	405,115	​	$	—	​	$	—
Corporate bonds(a)	​	​	606,331	​	​	—	​	​	606,331	​	​	—
Federal, state and local government bonds	​	​	—	​	​	—	​	​	—	​	​	—
Equity securities(b)	​	​	1,482,528	​	​	1,482,528	​	​	—	​	​	—
Total	​	$	2,493,974	​	$	1,887,643	​	$	606,331	​	$	—

(a)   Includes ten corporate bonds due within ten years rated BBB- or better by the S&P.

(b)   Includes 65 companies spread over various market sectors.

The fair values of the Association’s pension plan assets at December 31, 2013, by asset category (see note 13 for the definition of levels) are as follows:

Asset Category	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Cash and money market funds	​	$	295,955	​	$	295,955	​	$	—	​	$	—
Corporate bonds(a)	​	​	669,098	​	​	—	​	​	669,098	​	​	—
Federal, state and local government bonds	​	​	—	​	​	—	​	​	—	​	​	—
Equity securities(b)	​	​	1,485,634	​	​	1,485,634	​	​	—	​	​	—
Total	​	$	2,450,687	​	$	1,781,589	​	$	669,098	​	$	—

(a)   Includes eleven corporate bonds due within ten years rated BBB- or better by the S&P.

(b)   Includes 70 companies spread over various market sectors.

Employee Savings Plan

The Company also maintains a defined contribution plan for eligible employees under Section 401(k) of the Internal Revenue Code. All employees who meet the plan eligibility requirements may elect to participate in the plan by making contributions up to the maximum permissible IRS limit. The Company makes matching contributions limited to 50% of the participant’s contributions up to 6% of compensation. Savings plan expense was approximately $26,000 and $26,400 for the years ended December 31, 2014 and 2013, respectively.

Employee Stock Ownership Plan

Effective upon completion of the Company’s initial public offering in July 2013, the Association established an Employee Stock Ownership Plan (“ESOP”) for all eligible employees who complete a twelve-month period of employment with the Association, have attained the age of 21 and complete at least 1,000 hours of service in a plan year. The ESOP used $555,450 in proceeds from a term loan obtained from the Company to purchase 55,545 shares of Company common stock. The remaining term loan principal is payable over 25 equal annual installments through December 31, 2037. The interest rate on the term loan is the prime rate. Each year, the Association intends to make discretionary contributions to the ESOP, which will be equal to principal and interest payments required on the term loan. The Association may substitute dividends paid, if any, on the Company common stock held by the ESOP for discretionary contributions.

Shares purchased with the loan proceeds provide collateral for the term loan and are held in a suspense account for future allocations among participants. Contributions to the ESOP and shares released from the suspense account are to be allocated among the participants on the basis of compensation, as described by the ESOP, in the year of allocation.

ESOP shares pledged as collateral were initially recorded as unearned ESOP shares in the consolidated statements of financial condition. Thereafter, on a monthly basis, 185 shares are committed to be released, compensation expense is recorded equal to the number of shares committed to be released times the monthly average market price of the shares, and the committed shares become outstanding for basic net income per common share computations. ESOP compensation expense was approximately $21,400, and $22,200 for the years ended December 31, 2014 and 2013, respectively.

The ESOP shares were as follows:

​	December 31,
​	2014			2013
Allocated shares	​	​	2,221	​	​	—
Shares committed to be released	​	​	2,221	​	​	2,221
Unearned shares	​	​	51,103	​	​	53,324
Total ESOP shares	​	​	55,545	​	​	55,545
Fair value of unearned shares	​	$	506,431	​	$	504,000

Equity Incentive Plan

On July 17, 2014, the Board of Directors adopted the Sunnyside Bancorp, Inc. 2014 Equity Incentive Plan (the “Stock Incentive Plan”) which was approved by shareholders at the Company’s 2014 Annual Meeting of Shareholders held on September 16, 2014. Stock options and restricted stock may be granted to directors, officers and other employees of the Company. The maximum number of shares which may be issued upon exercise of the options under the plan cannot exceed 79,350 shares. The maximum number of shares of stock that may be issued as restricted stock awards cannot exceed 23,805.

No awards have been granted under the Stock Incentive Plan, and therefore, no compensation expense was recognized through December 31, 2014.

Other Retirement Benefits

Effective June 2002, the Company entered into salary continuation agreements with certain of its officers. The agreements provide for specified benefit payments for life, 15-year period certain commencing at normal retirement, as well as payments upon early retirement, disability and death. The amounts payable under the agreements vest at an annual rate of 5% over 20 years and are computed as a specified percentage of a defined total compensation base, less (i) benefits under the Company’s pension plan, 401(k) plan and deferred compensation agreements, and (ii) a portion of social security benefits. The Association also entered into agreements providing for split-dollar life insurance death benefits based on each officer’s total compensation, as defined. The salary continuation and split-dollar agreements are unfunded, non-qualified benefits plans. However, the Company has purchased life insurance policies held by a Rabbi Trust in consideration of its obligations under the salary continuation agreements and certain prior deferred compensation agreements. During 2009, certain of these obligations were renegotiated by the Company with the purchase of annuity contracts. At December 31, 2014 and 2013, recorded obligations of $415,316 and $431,251, respectively, are included in other liabilities with respect to these agreements. The related life insurance policies are reported as assets at their cash surrender values of $2,073,455 and $2,008,494 at December 31, 2014 and 2013, respectively. Total expense (credit) under these plans was approximately $(1,400) and $(24,100) for the years ended December 31, 2014 and 2013, respectively.

XML

BENEFIT PLANS - ESOP shares (Details 6) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Shares committed to be released	185
Employee Stock Ownership Plan (ESOP)
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Allocated shares	2,221
Shares committed to be released	2,221	2,221
Unearned shares	51,103	53,324
Total ESOP shares	55,545	55,545
Fair value of unearned shares	$ 506,431	$ 504,000

XML

ACCUMULATED OTHER COMPREHENSIVE LOSS - Components of accumulated other comprehensive loss (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss before taxes	$ (1,352,980)	$ (2,100,934)
Tax effect	537,076	833,982
Accumulated other comprehensive loss	(815,904)	(1,266,952)
Unrealized net loss on pension plan
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss before taxes	(1,340,386)	(1,204,899)
Unrealized loss on securities available for sale
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss before taxes	$ (12,594)	$ (896,035)

XML

BENEFIT PLANS - Fair values of the pension plan assets (Details 5) (USD $)	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2012
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 2,493,974		$ 2,450,687		$ 1,852,575
Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	1,887,643		1,781,589
Significant Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	606,331		669,098
Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets
Cash and money market funds
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	405,115		295,955
Cash and money market funds | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	405,115		295,955
Cash and money market funds | Significant Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets
Cash and money market funds | Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets
Corporate bonds
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	606,331	[1]	669,098	[2]
Corporate bonds | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets		[1]		[2]
Corporate bonds | Significant Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	606,331	[1]	669,098	[2]
Corporate bonds | Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets		[1]		[2]
Federal, state and local government bonds
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets
Federal, state and local government bonds | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets
Federal, state and local government bonds | Significant Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets
Federal, state and local government bonds | Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets
Equity Securities
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	1,482,528	[3]	1,485,634	[4]
Equity Securities | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	1,482,528	[3]	1,485,634	[4]
Equity Securities | Significant Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets		[3]		[4]
Equity Securities | Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets		[3]		[4]

[1] Includes ten corporate bonds due within ten years rated BBB- or better by the S&P.

[2] Includes eleven corporate bonds due within ten years rated BBB- or better by the S&P.

[3] Includes 65 companies spread over various market sectors.

[4] Includes 70 companies spread over various market sectors.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals)	12 Months Ended
	Dec. 31, 2014
Summary Of Significant Accounting Policies [Line Items]
Defined contribution plan, employer matching contribution percent of match	50.00%
Defined contribution plan maximum annual contributions per employee percent	6.00%
ESOP repayment period for common stock borrowed from company	25 years
Stock option | 2014 Stock Incentive Plan
Summary Of Significant Accounting Policies [Line Items]
Maximum number of shares which may be issued	79,350
Restricted stock | 2014 Stock Incentive Plan
Summary Of Significant Accounting Policies [Line Items]
Maximum number of shares which may be issued	23,805

XML

DEPOSITS - Summarization by remaining period to contractual maturity (Details 1) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Deposits [Abstract]
One year or less	$ 13,953,000	$ 19,416,000
Over one to three years	15,532,000	9,239,000
Over three years	2,216,000	3,939,000
Certificates of deposit	$ 31,701,353	$ 32,593,750

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2014

Summary of Significant Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements are comprised of the accounts of Sunnyside Bancorp. Inc., and its wholly-owned subsidiary, Sunnyside Federal Savings and Loan Association of Irvington (the “Association”). All significant intercompany accounts and transactions have been eliminated in consolidation.

Basis Of Financial Statement Presentation

Basis of Financial Statement Presentation

The financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statement of financial condition and revenues and expenses for the period then ended. Actual results could differ significantly from those estimates.

A material estimate that is particularly susceptible to significant change relates to the determination of the allowance for loan losses. Management believes that the allowance for loan losses is adequate. While management uses available information to recognize losses on loans, future additions to the allowance for loan losses may be necessary based on changes in economic conditions in the Company’s market area.

In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses. Such agencies may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination.

Cash And Cash Equivalents

Cash and Cash Equivalents

For purposes of reporting cash flows, the Company considers all cash and amounts due from depository institutions and interest-bearing deposits in other depository institutions with original maturities of three months or less to be cash equivalents.

Investment And Mortgage-Backed Securities

Investment and Mortgage-Backed Securities

Securities that the Company has the positive intent and ability to hold to maturity are classified as held-to-maturity securities and reported at amortized cost. Securities classified as available-for-sale securities are reported at fair value, with unrealized holding gains or losses reported in a separate component of retained earnings. As of December 31, 2014 and 2013, the Company had no securities classified as held for trading.

The Company conducts a periodic review and evaluation of the securities portfolio to determine if a decline in the fair value of any security below its cost basis is other-than-temporary. The evaluation of other-than-temporary impairment considers the duration and severity of the impairment, the Company’s intent and ability to hold the securities and assessments of the reason for the decline in value and the likelihood of a near-term recovery. If such a decline is deemed other-than-temporary, the security is written down to a new cost basis and the resulting loss is charged to income as a component of non-interest expense.

Premiums and discounts on securities are amortized by use of the level-yield method, over the life of the individual securities. Gain or loss on sales of securities is based upon the specific identification method.

Loans Receivable

Loans Receivable

Loans receivable are stated at unpaid principal balances less the allowance for loan losses and net deferred loan fees.

Recognition of interest on the accrual method is generally discontinued when interest or principal payments are ninety days or more in arrears, or when other factors indicate that the collection of such amounts is doubtful. At that time, a loan is placed on a nonaccrual status, and all previously accrued and uncollected interest is reversed against interest income in the current period. Interest on such loans, if appropriate, is recognized as income when payments are received. A loan is returned to an accrual status when factors indicating doubtful collectibility no longer exist.

Allowance For Loan Losses

Allowance for Loan Losses

An allowance for loan losses is maintained at a level, to the best of management’s knowledge, to cover all known and inherent losses in the portfolio that are both probable and reasonable to estimate. Management of the Association, in determining the provision for loan losses considers the risks inherent in its loan portfolio and changes in the nature and volume of its loan activities, along with the general economic and real estate market conditions. The Company utilizes a two tier approach: (1) identification of problem loans and establishment of specific loss allowances on such loans; and (2) establishment of general valuation allowances on the remainder of its loan portfolio. The Company maintains a loan review system which allows for a periodic review of its loan portfolio and the early identification of potential problem loans. Such system takes into consideration, among other things, delinquency status, size of loans, type of collateral, and financial condition of the borrowers. Specific loan losses are established for identified loans based on a review of such information and appraisals of the underlying collateral. General loan losses are based upon a combination of factors including, but not limited to, actual loan loss experience, composition of the loan portfolio, current economic conditions, and management's judgment. Although management believes that adequate specific and general loan loss allowances are established, actual losses are dependent upon future events and, as such, further additions to the level of specific and general loan loss allowances may be necessary.

A loan evaluated for impairment is deemed to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. An insignificant payment delay, which is defined as up to ninety days by the Company, will not cause a loan to be classified as impaired. A loan is not impaired during a period of delay in payment if the Association expects to collect all amounts due, including interest accrued at the contractual interest rate for the period of delay. The amount of loan impairment is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or, as a practical expedient, at the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. All loans identified as impaired are evaluated independently. The Association does not aggregate such loans for evaluation purposes.

Federal Home Loan Bank Of New York stock

Federal Home Loan Bank of New York stock

As a member of the Federal Home Loan Bank of New York (“FHLB”), the Company is required to acquire and hold shares of FHLB Class B stock. The holding requirement varies based on the Company’s activities, primarily its outstanding borrowings, with the FHLB. The investment in FHLB stock is carried at cost. The Company conducts a periodic review and evaluation of its FHLB stock to determine if any impairment exists.

Premises And Equipment

Premises and Equipment

Premises and equipment are comprised of land, building, and furniture, fixtures, and equipment, at cost, less accumulated depreciation. Depreciation charges are computed on the straight-line method over the following estimated useful lives:

Building and improvements	5 to 40 years
Furniture, fixtures and equipment	2 to 10 years

Bank-Owned Life Insurance

Bank-Owned Life Insurance

Bank-owned life insurance (“BOLI”) is accounted for in accordance with Financial Accounting Standards Board “FASB”) guidance. The cash surrender value of BOLI is recorded on the statement of financial condition as an asset and the change in the cash surrender value is recorded as non-interest income. The amount by which any death benefits received exceeds a policy’s cash surrender value is recorded in non-interest income at the time of receipt. A liability is also recorded on the statement of financial condition for postretirement death benefits provided by the split-dollar endorsement policy. A corresponding expense is recorded in non-interest expense for the accrual of benefits over the period during which employees provide services to earn the benefits.

Income Taxes

Income Taxes

Federal and state income taxes have been provided on the basis of reported income. The amounts reflected on the tax return differ from these provisions due principally to temporary differences in the reporting of certain items for financial reporting and income tax reporting purposes. The tax effect of these temporary differences is accounted as deferred taxes applicable to future periods. Deferred income tax expense or benefit is determined by recognizing deferred tax assets and liabilities for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. The realization of deferred tax assets is assessed and a valuation allowance provided, when necessary, for that portion of the asset which is not likely to be realized.

The Company accounts for uncertainty in income taxes recognized in the financial statements in accordance with accounting guidance which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As a result of the Company’s evaluation, no significant income tax uncertainties have been identified. Therefore, the Company recognized no adjustment for unrecognized income tax benefits for the years ended December 31, 2014 and 2013. The Company’s policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense in the statement of income. The amount of interest and penalties for the years ended December 31, 2014 and 2013 was immaterial. The Company is subject to U.S. federal income tax, as well as income tax of the State of New York. The Company is no longer subject to examination by taxing authorities for years before 2010.

Employee Benefits

Employee Benefits

Defined Benefit Plans:

The accounting guidance related to retirement benefits requires an employer to: (a) recognize in its statement of financial position an asset for a plan’s overfunded status or a liability for a plan’s underfunded status; (b) measure a plan’s assets and its obligations that determine its funded status as of the end of the employer’s fiscal year; and (c) recognize, in comprehensive income, changes in the funded status of a defined benefit postretirement plan in the year in which the changes occur. The accounting guidance requires that plan assets and benefit obligations be measured as of the date of the employer’s fiscal year-end statement of financial condition.

401K Plan:

The Company has a 401(k) plan covering substantially all employees. The Company matches 50% of the first 6% contributed by participants and recognizes expense as its contributions are made.

Employee Stock Ownership Plan:

The employee stock ownership plan (ESOP) is accounted for in accordance with the provisions of ASC 718-40, “Employers’ Accounting for Employee Stock Ownership Plans.” The funds borrowed by the ESOP from the Company to purchase the Company’s common stock are being repaid from the Association’s contributions over a period of up to 25 years. The Company’s common stock not yet allocated to participants is recorded as a reduction of stockholders’ equity at cost. Compensation expense for the ESOP is based on the market price of the Company’s stock and is recognized as shares are committed to be released to participants.

Equity Incentive Plan:

On July 17, 2014, the Board of Directors adopted the Sunnyside Bancorp, Inc. 2014 Equity Incentive Plan (the “Stock Incentive Plan”) which was approved by shareholders at the Company’s 2014 Annual Meeting of Shareholders held on September 16, 2014. Stock options and restricted stock may be granted to directors, officers and other employees of the Company. The maximum number of shares which may be issued upon exercise of the options under the plan cannot exceed 79,350 shares. The maximum number of shares of stock that may be issued as restricted stock awards cannot exceed 23,805.

The Stock Incentive Plan will remain in effect as long as any awards under it are outstanding; however, no awards may be granted under the Stock Incentive Plan on or after the 10-year anniversary of the effective date of the Stock Incentive Plan or July 17, 2024.

Under FASB ASC Topic 718, the Company will recognize compensation expense on its income statement over the requisite service period or performance period based on the grant date fair value of stock options and other equity-based compensation (such as restricted stock). No awards have been granted under the 2014 Stock Incentive Plan and therefore, no compensation expense was recognized through December 31, 2014.

Comprehensive Income

Comprehensive Income

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, and the actuarial gains and losses of the pension plan, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income.

Concentration Of Credit Risk and Interest-Rate Risk

Concentration of Credit Risk and Interest-Rate Risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, investment and mortgage-backed securities and loans. Cash and cash equivalents include amounts placed with highly rated financial institutions. Investment securities include securities backed by the U.S. Government and other highly rated instruments. The Company’s lending activity is primarily concentrated in loans collateralized by real estate in the State of New York. As a result, credit risk is broadly dependent on the real estate market and general economic conditions in the state.

The Company is principally engaged in the business of attracting deposits from the general public and using these deposits, together with borrowings and other funds, to make loans secured by real estate in the State of New York. The potential for interest-rate risk exists as a result of the shorter duration of interest-sensitive liabilities compared to the generally longer duration of interest-sensitive assets. In a rising rate environment, liabilities will reprice faster than assets, thereby reducing net interest income. For this reason, management regularly monitors the maturity structure of the Company's assets and liabilities in order to measure its level of interest-rate risk and to plan for future volatility.

Earnings Per Share

Earnings Per Share

Basic earnings per common share, or EPS, are computed by dividing net income by the weighted-average common shares outstanding during the year. The weighted-average common shares outstanding includes the weighted-average number of shares of common stock outstanding less the weighted average number of unallocated shares held by the ESOP. For EPS calculations, ESOP shares that have been committed to be released are considered outstanding. ESOP shares that have not been committed to be released are excluded from outstanding shares on a weighted average basis for EPS calculations.

Earnings per share are not applicable for periods prior to the date of conversion, July 15, 2013.

Reclassifications

Reclassifications

Certain amounts in the 2013 financial statements have been reclassified in order to conform to the 2014 presentation.

Advertising Costs

Advertising Costs

It is the Company’s policy to expense advertising costs in the period in which they are incurred.

Subsequent Events

Subsequent Events

The Company has evaluated all events subsequent to the balance sheet date of December 31, 2014, through the date of this report, and has determined that there are no subsequent events that require disclosure under FASB guidance.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In January 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-04, “Receivables — Troubled Debt Restructurings by Creditors (Subtopic 310-40) Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure,” which applies to all creditors who obtain physical possession of residential real estate property collateralizing a consumer mortgage loan in satisfaction of a receivable. The amendments in this update clarify when an in substance repossession or foreclosure occurs and requires disclosure of both (1) the amount of foreclosed residential real estate property held by a creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments in ASU 2014-04 are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2014. Early adoption is permitted and entities can elect to adopt a modified retrospective transition method or a prospective transition method. The adoption of this guidance should not have a material impact on the Company’s financial condition or results of operations.

In June 2014, the FASB issued ASU 2014-12, “Compensation — Stock Compensation (Topic 718)”. The amendments in this ASU require a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The performance target should not be reflected in estimating the grant-date fair value of the award, and compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The amendments in this ASU are effective for annual periods beginning after December 15, 2015. The adoption of this guidance should not have a material impact on the Company’s financial condition or results of operations.

In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” This update is intended to provide guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Management is required under the new guidance to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued when preparing financial statements for each interim and annual reporting period. If conditions or events are identified, the ASU specifies the process that must be followed by management and also clarifies the timing and content of going concern footnote disclosures in order to reduce diversity in practice. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2016. Early adoption is permitted. The adoption of this guidance should not have a material impact on the Company’s financial condition or results of operations.

In January 2015, the FASB issued ASU 2015-01, “Income Statement — Extraordinary and Unusual Items (Subtopic 225-20)”. This ASU eliminates extraordinary items from US GAAP and will align more closely with International Accounting Standards 1, “Presentation of Financial Statements”. The amendments in this ASU are effective beginning after December 15, 2015. The adoption of this guidance should not have a material impact on the Company’s financial condition or results of operations.

In February 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810)”. This ASU focuses on the consolidation evaluation for reporting organizations that are required to evaluate consolidation of certain legal entities by reducing the number of consolidation models from four to two and is intended to improve current GAAP. The amendments in this ASU are effective beginning after December 15, 2016. The adoption of this guidance should not have a material impact on the Company’s financial condition or results of operations.

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ACCRUED INTEREST RECEIVABLE (Tables)

12 Months Ended

Dec. 31, 2014

Accrued Interest Receivable [Abstract]

Schedule of accrued interest receivable

6.   ACCRUED INTEREST RECEIVABLE

​	December 31,
​	2014			2013
Loans	​	$	137,154	​	$	140,967
Mortgage-backed securities	​	​	89,211	​	​	107,666
Investment securities	​	​	49,206	​	​	19,163
​	​	$	275,571	​	$	267,796

XML

ACCRUED INTEREST RECEIVABLE (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Interest Receivable [Line Items]
Accrued interest receivable	$ 275,571	$ 267,796
Loans
Interest Receivable [Line Items]
Accrued interest receivable	137,154	140,967
Mortgage-backed securities
Interest Receivable [Line Items]
Accrued interest receivable	89,211	107,666
Investment securities
Interest Receivable [Line Items]
Accrued interest receivable	$ 49,206	$ 19,163

XML

LOANS RECEIVABLE, NET - Allowance for loan losses (Details 1) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of year	$ 340,000		$ 396,000
Provision for loan losses	55,910	24,500
Loans Receivable
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of year	340,145	314,490	396,055
Provision for loan losses	55,910	24,500
Charge offs
Recoveries		1,155
Balance at end of year	$ 396,055	$ 340,145

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Consolidated Statements Of Comprehensive (Loss) [Abstract]
Net (loss)	$ (210,367)	$ (59,826)
Defined benefit pension plans:
Net loss arising during the period	(208,328)	(122,358)
Amortization of loss included in net periodic plan cost	72,841	64,505
Unrealized gains (losses) on securities available for sale:
Unrealized holding gains (losses) arising during the period	897,094	(1,068,507)
Reclassification adjustment for (gains) losses included in operations	(13,653)	(159,163)
Other comprehensive income (loss), before tax	747,954	(1,285,523)
Income tax (benefit) expense related to items of other comprehensive income	296,906	(510,298)
Other comprehensive income (loss), net of tax	451,048	(775,225)
Comprehensive income (loss)	$ 240,681	$ (835,051)

XML

SECURITIES

12 Months Ended

Dec. 31, 2014

Securities [Abstract]

SECURITIES

3.   SECURITIES

​

December 31, 2014

​

Amortized Cost

Gross Unrealized

Fair Value

​

Gains

Losses

Securities held to maturity:

​

​

​

​

​

​

​

​

​

​

​

​

U.S. government and agency obligations

​

$

2,000,000

​

$​

76,654

​

​$

—

​

$​

2,076,654

State, county, and municipal obligations

​

817,280

​

10,234

​

2,423

​

825,091

Mortgage-backed securities

​

​

3,336,957

​

​

138,807

​

​

—

​

​

3,475,764

​

​

$

6,154,237

​

$

225,695

​

$

2,423

​

$

6,377,509

Securities available for sale:

​

​

​

​

​

​

​

​

​

​

​

​

U.S. government and agency obligations

​

$

5,997,345

​

$

2,025

​

$

58,756

​

$

5,940,614

Mortgage-backed securities

​

​

28,526,918

​

​

229,096

​

​

184,959

​

​

28,571,055

​

​

$

34,524,263

​

$

231,121

​

$

243,715

​

$

34,511,669

​

December 31, 2013

​

Amortized Cost

Gross Unrealized

Fair Value

​

Gains

Losses

Securities held to maturity:

​

​

​

​

​

​

​

​

​

​

​

​

State, county, and municipal obligations

​

$

489,566

​

$

17,035

​

$

—

​

$

506,601

Mortgage-backed securities

​

​

4,176,942

​

​

125,291

​

​

—

​

​

4,302,233

​

​

$

4,666,508

​

$

142,326

​

$

—

​

$

4,808,834

Securities available for sale:

​

​

​

​

​

​

​

​

​

​

​

​

U.S. government and agency obligations

​

$

3,996,781

​

$

—

​

$

225,048

​

$

3,771,733

Mortgage-backed securities

​

​

35,139,713

​

​

100,428

​

​

771,416

​

​

34,468,725

​

​

$

39,136,494

​

$

100,428

​

$

996,464

​

$

38,240,458

Mortgage-backed securities consist of securities guaranteed by Ginnie Mae, Fannie Mae, Freddie Mac, and the Small Business Administration with amortized costs of $5.1 million, $14.0 million, $7.3 million, and $5.5 million, respectively, at December 31, 2014 ($6.3 million, $16.4 million, $9.1 million, and $7.5 million, respectively, at December 31, 2013).

Proceeds from the sale of securities available for sale amounted to $1,878,000 and $7,381,000 for the years ended December 31, 2014 and December 31, 2013, respectively. Net gains of $13,700 and $4,800 were recognized on these sales for the years ended December 31, 2014 and 2013, respectively.

Proceeds from the sale of securities held to maturity amounted to $231,000 and $2,765,000 for the years ended December 31, 2014 and 2013, respectively. Net gains of $4,400 and $159,000 were recognized on these sales, respectively. The sale of the securities occurred after the Company had already collected a substantial portion (at least 85%) of the principal outstanding at acquisition due to prepayments on the debt securities.

The following is a summary of the amortized cost and fair value of securities at December 31, 2014 and 2013, by remaining period to contractual maturity. Actual maturities may differ from these amounts because certain debt security issuers have the right to call or redeem their obligations prior to contractual maturity. In addition, mortgage backed securities that amortize monthly are listed in the period the security is legally set to pay off in full.

​

December 31, 2014

​

Held to Maturity

Available for Sale

​

Amortized Cost

Fair Value

Amortized Cost

Fair Value

Within one year

​

$

—

​

$

—

​

$

—

​

$

—

After one to five years

​

​

391,777

​

​

394,383

​

​

3,997,344

​

​

3,957,863

After five to ten years

​

​

79,829

​

​

82,066

​

​

8,769,676

​

​

8,803,062

After ten years

​

​

5,682,631

​

​

5,901,060

​

​

21,757,243

​

​

21,750,744

​

​

$

6,154,237

​

$

6,377,509

​

$

34,524,263

​

$

34,511,669

​

December 31, 2013

​

Held to Maturity

Available for Sale

​

Amortized Cost

Fair Value

Amortized Cost

Fair Value

Within one year

​

$

—

​

$

—

​

$

—

​

$

—

After one to five years

​

​

110,095

​

​

116,846

​

​

574,576

​

​

577,199

After five to ten years

​

​

379,471

​

​

389,755

​

​

12,429,566

​

​

12,191,416

After ten years

​

​

4,176,942

​

​

4,302,233

​

​

26,132,352

​

​

25,471,843

​

​

$

4,666,508

​

$

4,808,834

​

$

39,136,494

​

$

38,240,458

The following tables summarize the fair values and unrealized losses of securities with an unrealized loss at December 31, 2014 and 2013, segregated between securities that have been in an unrealized loss position for less than one year, or one year or longer, at the respective dates.

​

December 31, 2014

​

Under One Year

One Year or More

​

Fair Value

Gross Unrealized Loss

Fair Value

Gross Unrealized Loss

Securities available for sale:

​

​

​

​

​

​

​

​

​

​

​

​

U.S. government and agency obligations

​

$

999,738

​

$

262

​

$

2,938,851

​

$

58,494

Mortgage-backed securities

​

​

5,573,324

​

​

21,827

​

​

6,116,841

​

​

163,131

​

​

​

6,573,062

​

​

22,089

​

​

9,055,692

​

​

221,625

Securities held to maturity:

​

​

​

​

​

​

​

​

​

​

​

​

State, county, and municipal obligations

​

​

204,584

​

​

2,423

​

​

—

​

​

—

​

​

$

6,777,646

​

$

24,512

​

$

9,055,692

​

$

221,625

​

December 31, 2013

​

Under One Year

One Year or More

​

Fair Value

Gross Unrealized Loss

Fair Value

Gross Unrealized Loss

Securities available for sale:

​

​

​

​

​

​

​

​

​

​

​

​

U.S. government and agency obligations

​

$

3,771,733

​

$

225,048

​

$

—

​

$

—

Mortgage-backed securities

​

​

20,801,105

​

​

447,844

​

​

3,941,749

​

​

323,572

​

​

$

24,572,838

​

$

672,892

​

$

3,941,749

​

$

323,572

The unrealized losses are primarily due to changes in market interest rates subsequent to purchase. At December 31, 2014, a total of 19 securities were in an unrealized loss position (33 at December 31, 2013). The Company generally purchases securities issued by Government Sponsored Enterprises (GSE). Accordingly, it is expected that the GSE securities would not be settled at a price less than the Company’s amortized cost basis. The Company does not consider these investments to be other-than-temporarily impaired at December 31, 2014 and December 31, 2013 since the decline in market value is attributable to changes in interest rates and not credit quality and the Company has the intent and ability to hold these investments until there is a full recovery of the unrealized loss, which may be at maturity.

XML

BENEFIT PLANS - Change in benefit obligation, plan assets, and a reconciliation of the funded status (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$ 2,499,163	$ 2,278,426
Interest cost	104,214	116,099
Actuarial loss	146,862	272,169
Benefits paid	(198,582)	(167,531)
Projected benefit obligation at end of year	2,551,657	2,499,163
Change in fair value of plan assets:
Fair value of plan assets at beginning of year	2,450,687	1,852,575
Actual return on plan assets	128,964	339,792
Employer contributions	112,905	425,851
Benefits paid	(198,582)	(167,531)
Fair value of plan assets at end of year	2,493,974	2,450,687
Funded status of plan included in other liabilities	$ (57,683)	$ (48,476)

XML

REGULATORY CAPITAL - Association's actual capital amounts and ratios (Details 1) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Tangible Capital
Tangible Capital, Actual, Amount	$ 12,084	$ 12,225
Tangible Capital, Actual, Ratio	12.81%	13.25%
Tangible Capital, Minimum Capital Requirements, Amount	1,415	1,384
Tangible Capital, Minimum Capital Requirements, Ratio	1.50%	1.50%
Tier 1 (core) Capital
Tier 1 (core) Capital, Actual, Amount	12,084	12,225
Tier 1 (core) Capital, Actual, Ratio	12.81%	13.25%
Tier 1 (core) Capital, Minimum Capital Requirements, Amount	3,774	3,691
Tier 1 (core) Capital, Minimum Capital Requirements, Ratio	4.00%	4.00%
Tier 1 (core) Capital, To be Well Capitalized Under Prompt Corrective Action Provisions, Amount	4,718	4,613
Tier 1 (core) Capital, To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	5.00%	5.00%
Tier I Capital (Risk Based)
Tier I Risk-based Capital, Actual, Amount	12,084	12,225
Tier I Risk-based Capital, Actual, Ratio	30.50%	35.19%
Tier I Risk-based Capital, Minimum Capital Requirements, Amount	1,585	1,390
Tier I Risk-based Capital, Minimum Capital Requirements, Ratio	4.00%	4.00%
Tier I Risk-based Capital, To be Well Capitalized Under Prompt Corrective Action Provisions, Amount	2,378	2,085
Tier I Risk-based Capital, To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	6.00%	6.00%
Total Risk-based Capital
Total Risk-based Capital, Actual, Amount	12,480	12,565
Total Risk-based Capital, Actual, Ratio	31.49%	36.17%
Total Risk-based Capital, Minimum Capital Requirements, Amount	3,170	2,779
Total Risk-based Capital, Minimum Capital Requirements, Ratio	8.00%	8.00%
Total Risk-based Capital, To be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 3,963	$ 3,474
Total Risk-based Capital, To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	10.00%	10.00%

XML

DEPOSITS (Tables)

12 Months Ended

Dec. 31, 2014

Deposits [Abstract]

Schedule of deposits

​	December 31,
​	2014					2013
​	Weighted Average Rate		Amount			Weighted Average Rate		Amount
Non-interest bearing checking	​	0.00%	​	$	4,736,482	​	0.00%	​	$	3,575,695
NOW accounts	​	0.05%	​	​	10,730,326	​	0.05%	​	​	9,577,864
Regular savings and clubs	​	0.10%	​	​	21,479,246	​	0.10%	​	​	20,445,862
Super saver	​	0.15%	​	​	7,443,330	​	0.15%	​	​	8,491,734
Money market	​	0.10%	​	​	3,464,679	​	0.10%	​	​	3,339,699
​	​	​	​	​	47,854,063	​	​	​	​	45,430,854
Certificates of deposit	​	1.04%	​	​	31,701,353	​	1.47%	​	​	32,593,750
​	​	0.46%	​	$	79,555,416	​	0.72%	​	$	78,024,604

Schedule of certificates of deposit by contractual maturity

​	2014			2013
​	(In thousands)
One year or less	​	$	13,953	​	$	19,416
Over one to three years	​	​	15,532	​	​	9,239
Over three years	​	​	2,216	​	​	3,939
​	​	$	31,701	​	$	32,594

Schedule of interest expense on deposits

​	Year Ended December 31,
​	2014			2013
NOW	​	$	5,663	​	$	5,033
Savings and clubs	​	​	31,955	​	​	33,579
Money market	​	​	3,426	​	​	3,397
Certificates of deposit	​	​	355,676	​	​	531,891
​	​	$	396,720	​	$	573,900

XML

SECURITIES - Fair values and unrealized losses of securities with an unrealized loss (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Securities available for sale:
Under One Year, Fair Value	$ 6,573,062	$ 24,572,838
Under One Year, Gross Unrealized Loss	22,089	672,892
One Year or More, Fair Value	9,055,692	3,941,749
One Year or More, Gross Unrealized Loss	221,625	323,572
Marketable Securities
Under One Year, Fair Value	6,777,646
Under One Year, Gross Unrealized Loss	24,512
One Year or More, Fair Value	9,055,692
One Year or More, Gross Unrealized Loss	221,625
U.S.government and agency obligations
Securities available for sale:
Under One Year, Fair Value	999,738	3,771,733
Under One Year, Gross Unrealized Loss	262	225,048
One Year or More, Fair Value	2,938,851
One Year or More, Gross Unrealized Loss	58,494
Mortgage-backed securities
Securities available for sale:
Under One Year, Fair Value	5,573,324	20,801,105
Under One Year, Gross Unrealized Loss	21,827	447,844
One Year or More, Fair Value	6,116,841	3,941,749
One Year or More, Gross Unrealized Loss	163,131	323,572
State, county, and municipal obligations
Securities held to maturity:
Under One Year, Fair Value	204,584
Under One Year, Gross Unrealized Loss	2,423
One Year or More, Fair Value
One Year or More, Gross Unrealized Loss

XML

FAIR VALUE MEASUREMENTS AND DISCLOSURES

12 Months Ended

Dec. 31, 2014

Fair Value Measurements And Disclosures [Abstract]

FAIR VALUE MEASUREMENTS AND DISCLOSURES

13.   FAIR VALUE MEASUREMENTS AND DISCLOSURES

A.   Fair Value Measurements

The Accounting Standards Codification (“ASC”) Topic 820, “Fair Value Measurements and Disclosures,” defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC Topic 820 applies only to fair value measurements already required or permitted by other accounting standards and does not impose requirements for additional fair value measures. ASC Topic 820 was issued to increase consistency and comparability in reporting fair values.

The Company uses fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. The Company did not have any liabilities that were measured at fair value at December 31, 2014 and 2013. Securities available-for-sale are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets or liabilities on a non-recurring basis, such as foreclosed real estate owned and certain impaired loans. These non-recurring fair value adjustments generally involve the write-down of individual assets due to impairment losses.

In accordance with ASC Topic 820, the Company groups its assets at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value. These levels are:

• Level 1 — Valuation is based upon quoted prices for identical instruments traded in active markets.

• Level 2 — Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market.

• Level 3 — Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect the Company’s own estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include the use of option pricing models, discounted cash flow models and similar techniques. The results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability.

The Company bases its fair values on the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. ASC Topic 820 requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Assets that are measured on a recurring basis are limited to the available-for-sale securities portfolio. The available-for-sale portfolio is carried at estimated fair value with any unrealized gains and losses, net of taxes, reported as accumulated other comprehensive income or loss in stockholders’ equity. Substantially all of the available-for-sale portfolio consists of investment securities issued by government-sponsored enterprises. The fair values for substantially all of these securities are obtained from an independent securities broker. Based on the nature of the securities, the securities broker provides the Company with prices which are categorized as Level 2 since quoted prices in active markets for identical assets are generally not available for the majority of securities in the portfolio.

The following table provides the level of valuation assumptions used to determine the carrying value of assets measured at fair value on a recurring basis at December 31, 2014 and 2013:

Description

Value

(Level 1)

(Level 2)

(Level 3)

December 31, 2014:

​

​

​

​

Securities available for sale

​

$

34,511,669

​

$

—

​

$

34,511,669

​

$

—

December 31, 2013:

​

​

​

​

Securities available for sale

​

$

38,240,458

​

$

—

​

$

38,240,458

​

$

—

There were no assets measured at fair value on a non-recurring basis at December 31, 2014 and 2013.

B.   Fair Value Disclosures

The following methods and assumptions were used by the Company in estimating fair values of financial instruments as disclosed herein.

Cash and Cash Equivalents

For cash and due from banks and federal funds sold, the carrying amount approximates the fair value (Level 1).

Securities

The fair value of securities is estimated based on bid quotations received from securities dealers, if available (Level 1). If a quoted market price was not available, fair value was estimated using quoted market prices of similar instruments, adjusted for differences between the quoted instruments and the instruments being valued (Level 2).

FHLB and other stock, at cost

The fair value for FHLB and other stock, at cost is its carrying value, since this is the amount for which it could be redeemed. There is no active market for this stock, and the Company is required to maintain a minimum balance based upon the unpaid principal of home mortgage loans (Level 2).

Loans Receivable

Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type such as residential mortgage, commercial, and consumer. Each loan category is further segmented into fixed and adjustable rate interest terms and by performing and nonperforming categories (Level 3).

Deposits

The fair value of deposits with no stated maturity, such as non-interest-bearing demand deposits, savings, and NOW and money market accounts, is equal to the amount payable on demand (Level 1). The fair value of certificates of deposit is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits with similar remaining maturities (Level 2).

Short-Term Borrowings

The carrying amounts of federal funds purchased, and other short-term borrowings maturing within 90 days approximate their fair values. Fair values of other short-term borrowings are estimated using discounted cash flow analyses based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements (Level 1).

Long-Term Borrowings

The fair value of long-term borrowings is estimated using discounted cash flow analysis based on the current incremental borrowing rates for similar types of borrowing arrangements (Level 2).

Off-Balance-Sheet Instruments

In the ordinary course of business the Company has entered into off-balance-sheet financial instruments consisting of commitments to extend credit. Such financial instruments are recorded in the financial statements when they are funded. Their fair value would approximate fees currently charged to enter into similar agreements. For further information on these financial instruments, see Note 11.

The carrying values and estimated fair values of financial instruments are as follows (in thousands):

​

December 31,

​

2014

2013

​

Carrying Value

Estimated Fair Value

Carrying Value

Estimated Fair Value

​

(In Thousands)

Financial assets:

​

​

​

​

Cash and cash equivalents

​

$

3,720

​

$

3,720

​

$

2,637

​

$

2,637

Securities held to maturity

​

​

6,154

​

​

6,378

​

​

4,667

​

​

4,809

Securities available for sale

​

​

34,512

​

​

34,512

​

​

38,240

​

​

38,240

Loans receivable

​

​

43,220

​

​

44,097

​

​

40,040

​

​

40,180

FHLB and other stock, at cost

​

​

208

​

​

208

​

​

222

​

​

222

Accrued interest receivable

​

​

276

​

​

276

​

​

268

​

​

268

Financial liabilities:

​

​

​

​

Deposits

​

​

79,555

​

​

79,851

​

​

78,025

​

​

78,533

The fair value estimates are made at a discrete point in time based on relevant market information and information about the financial instruments. Fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Further, the foregoing estimates may not reflect the actual amount that could be realized if all or substantially all of the financial instruments were offered for sale.

In addition, the fair value estimates were based on existing on-and-off balance sheet financial instruments without attempting to value the anticipated future business and the value of assets and liabilities that are not considered financial instruments. Other significant assets and liabilities that are not considered financial assets and liabilities include premises and equipment and advances from borrowers for taxes and insurance. In addition, the tax ramifications related to the realization of the unrealized gains and losses have a significant effect on fair value estimates and have not been considered in any of the estimates.

Finally, reasonable comparability between financial institutions may not be likely due to the wide range of permitted valuation techniques and numerous estimates which must be made given the absence of active secondary markets for many of the financial instruments. The lack of uniform valuation methodologies introduces a greater degree of subjectivity to these estimated fair values.