Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2018

Earnings Per Share, Policy [Policy Text Block]

Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted average number of shares of common stock outstanding (basic shares). Included in basic shares are certain shares that have been accrued as of the balance sheet date as deferred compensation for members of Bancshares’ Board of Directors. Diluted net income per share is computed by dividing net income by the weighted average number of shares of common stock outstanding, adjusted for the effect of potentially dilutive stock awards outstanding during the period (dilutive shares). The dilutive shares consist of nonqualified stock option grants issued to employees and members of Bancshares’ Board of Directors pursuant to Bancshares’

2013

Incentive Plan (the

“2013

Incentive Plan”) previously approved by Bancshares’ shareholders. The following table reflects weighted average shares used to calculate basic and diluted net income per share for the periods presented.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Basic shares		6,304,717		6,176,381		6,236,197		6,170,892
Dilutive shares		377,951		320,501		377,951		320,501
Diluted shares		6,682,668		6,496,882		6,614,148		6,491,393

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
	(Dollars in Thousands, Except Per Share Data)
Net income	$	240	$	635	$	1,013	$	1,455
Basic net income per share	$	0.04	$	0.10	$	0.17	$	0.24
Diluted net income per share	$	0.03	$	0.10	$	0.15	$	0.22

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Income

Comprehensive income consists of net income, as well as unrealized holding gains and losses that arise during the period associated with the Company’s available-for-sale securities portfolio and the effective portion of cash flow hedge derivatives. In the calculation of comprehensive income, reclassification adjustments are made for gains or losses realized in the statement of operations associated with the sale of available-for-sale securities, settlement of derivative contracts or changes in the fair value of cash flow derivatives.

New Accounting Pronouncements, Policy [Policy Text Block]

Accounting Policies Recently Adopted and Pending Accounting Pronouncements

Accounting Standards Update (“ASU”)

2017

, “Targeted Improvements to Accounting for Hedging Activities.”

This ASU simplifies and expands the eligible hedging strategies for financial and nonfinancial risks by more closely aligning hedge accounting with a company’s risk management activities, and also simplifies the application of

Accounting Standards Codification (“ASC”) Topic

815,

Derivatives and Hedging

, through targeted improvements in key practice areas. This includes expanding the list of items eligible to be hedged and amending the methods used to measure the effectiveness of hedging relationships. In addition, the ASU prescribes how hedging results should be presented and requires incremental disclosures. These changes are intended to allow preparers more flexibility and to enhance the transparency of how hedging results are presented and disclosed. Further, the ASU provides partial relief on the timing of certain aspects of hedge documentation and eliminates the requirement to recognize hedge ineffectiveness separately in earnings in the current period. The ASU is effective for years beginning after

December 15, 2018,

and interim periods within those years. The Company does

not

expect the adoption of ASU

2017

to have a material impact on the Company's consolidated financial statements.

ASU

2017

04,

“Intangibles-Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment.”

Issued in

January 2017,

ASU

2017

simplifies the manner in which an entity is required to test goodwill for impairment by eliminating Step

from the goodwill impairment test. Step

measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. In computing the implied fair value of goodwill under Step

an entity, prior to the amendments in ASU

2017

04,

had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities, including unrecognized assets and liabilities, in accordance with the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. However, under the amendments in ASU

2017

04,

an entity should (

) perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and (

) recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, with the understanding that the loss recognized should

not

exceed the total amount of goodwill allocated to that reporting unit. Additionally, ASU

2017

removes the requirements for any reporting unit with a

zero

or negative carrying amount to perform a qualitative assessment and, if it fails such qualitative test, to perform Step

of the goodwill impairment test. ASU

2017

is effective prospectively for annual, or any interim, goodwill impairment tests in fiscal years beginning after

December 15, 2019.

Management is currently evaluating the impact that this ASU will have on the Company’s consolidated financial statements

ASU

2016

13,

"Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments.”

Issued in

June 2016,

ASU

2016

removes the thresholds that companies apply to measure credit losses on financial instruments measured at amortized cost, such as loans, receivables and held-to-maturity debt securities. Under current U.S. GAAP, companies generally recognize credit losses when it is probable that the loss has been incurred. The revised guidance will remove all current recognition thresholds and will require companies to recognize an allowance for lifetime expected credit losses. Credit losses will be immediately recognized through net income; the amount recognized will be based on the current estimate of contractual cash flows

not

expected to be collected over the financial asset’s contractual term. ASU

2016

also amends the credit loss measurement guidance for available-for-sale debt securities. For public business entities, ASU

2016

is effective for financial statements issued for fiscal years beginning after

December 15, 2019,

and interim periods within those years. Institutions will be required to apply the changes through a cumulative-effect adjustment to their retained earnings as of the beginning of the

first

reporting period in which the guidance is effective. Management is currently evaluating the impact that this ASU will have on the Company’s consolidated financial statements

ASU

2016

02,

“Leases (Topic

842

).”

Issued in

February 2016,

ASU

2016

was issued by the Financial Accounting Standards Board (“FASB”) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and by disclosing key information about leasing arrangements. ASU

2016

will require organizations that lease assets (lessees) to recognize on the balance sheet the assets and liabilities for the rights and obligations created by the lease for all operating leases under current U.S. GAAP with a term of more than

months. The recognition, measurement and presentation of expenses and cash flows arising from a lease are

not

significantly changed under ASU

2016

02,

and there will continue to be differentiation between finance leases and operating leases. The accounting applied by the lessor in a lease transaction remains largely unchanged from previous U.S. GAAP. ASU

2016

is effective for fiscal years beginning after

December 15, 2018,

and interim periods within those years. Management is currently evaluating the impact that this ASU will have on the Company’s consolidated financial statements; however, because the Company has several leases, assets and liabilities are expected to increase upon adoption for right-of-use assets and lease liabilities.

ASU

2016

01,

“Financial Instruments - Overall (Subtopic

825

): Recognition and Measurement of Financial Assets and Financial Liabilities (An Amendment of FASB ASC

825

).”

Issued in

January 2016,

ASU

2016

was intended to enhance the reporting model for financial instruments to provide users of financial statements with improved decision-making information. The amendments of ASU

2016

include: (i) requiring equity investments, except those accounted for under the equity method of accounting or those that result in the consolidation of an investee, to be measured at fair value, with changes in fair value recognized in net income; (ii) requiring a qualitative assessment to identify impairment of equity investments without readily determinable fair values; and (iii) clarifying that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. ASU

2016

became effective for the Company on

January 1, 2018.

The adoption of ASU

2016

did

not

have a material impact on the Company's consolidated financial statements.

ASU

2014

09,

“Revenue from Contracts with Customers (Topic

606

”

Issued in

May 2014,

ASU

2014

added

FASB ASC Topic

606,

Revenue from Contracts with Customers,

and superseded revenue recognition requirements in

ASC

605,

Revenue Recognition

and certain cost guidance in

ASC

605

35,

Revenue Recognition – Construction-Type and Production-Type Contracts.

ASU

2014

requires an entity to recognize revenue when (or as) an entity transfers control of goods or services to a customer at the amount to which the entity expects to be entitled. Depending on whether certain criteria are met, revenue should be recognized either over time, in a manner that depicts the entity’s performance, or at a point in time, when control of the goods or services is transferred to the customer. ASU

2014

became effective for the Company on

January 1, 2018.

The adoption of ASU

2014

did

not

have a material impact on the Company's consolidated financial statements.

Revenue from Contract with Customer [Policy Text Block]

Revenue

January 1, 2018,

the Company implemented ASU

2014

09,

Revenue from Contracts with Customers

, codified at

ASC

606.

The Company adopted ASC

606

using the modified retrospective transition method. As of

December 31, 2017,

the Company had

uncompleted customer contracts and, as a result,

cumulative transition adjustment was made to the Company’s accumulated deficit during the

nine

-month period ended

September 30, 2018.

Results for reporting periods beginning

January 1, 2018

are presented under ASC

606,

while prior period amounts continue to be reported under legacy U.S. GAAP.

The majority of the Company’s revenue is generated through interest earned on financial instruments, including loans and investment securities, which falls outside the scope of ASC

606.

The Company also generates revenue from insurance- and lease-related contracts that also fall outside the scope of ASC

606.

All of the Company’s revenue that is subject to ASC

606

is included in non-interest income; however,

not

all non-interest income is subject to ASC

606.

Revenue earned by the Company subject to ASC

606

primarily consists of service and other charges on deposit accounts, mortgage fees from secondary market transactions at the Bank, ATM fee income and other non-interest income. Revenue generated from these sources for the

nine

months ended

September 30, 2018

and

2017

was

$2.4

million and

$2.2

million, respectively, and for the

three

months ended

September 30, 2018

and

2017

was

$0.8

million and

$0.7

million, respectively. All sources of the Company’s revenue subject to ASC

606

are transaction-based, and revenue is recognized at the time the transaction is executed, which is the same time the Company’s performance obligation is satisfied. The Company had

contract liabilities or unsatisfied performance obligations with customers as of

September 30, 2018.