Note 19 - New Accounting Standards	12 Months Ended
Dec. 31, 2017
Notes to Financial Statements
Description of New Accounting Pronouncements Not yet Adopted [Text Block]	NOTE 19: NEW ACCOUNTING STANDARDS Recently Adopted Accounting Standards Reporting Comprehensive Income – In February 2018, the FASB issued ASU No. 2018 - 02, Income Statement-Reporting Comprehensive Income (Topic 220 ) (“ASU 2018 - 02” ), that allows a reclassification from AOCI to retained earnings for stranded tax effects resulting from the 2017 Act. Current US GAAP requires the remeasurement of deferred tax assets and liabilities as a result of a change in tax laws or rates to be presented in net income from continuing operations. Consequently, the original deferred tax amount recorded through AOCI at the old rate will remain in AOCI despite the fact that its related deferred tax asset/liability will be reduced through continuing operations to reflect the new rate, resulting in “stranded” tax effects in AOCI. ASU 2018 - 02 requires a reclassification from AOCI to retained earnings for those stranded tax effects resulting from the newly enacted federal corporate income tax rate. The amount of reclassification would be the difference between 1 ) the amount initially charged or credited directly to other comprehensive income at the previous enacted federal corporate income tax rate that remains in AOCI and 2 ) the amount that would have been charged or credited using the newly enacted federal corporate income tax rate, excluding the effect of any valuation allowance previously charged to income from continuing operations. The effective date is for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. As permitted, we elected to early adopt the provisions of ASU 2018 - 02 during the fourth quarter 2017, which resulted in a reclassification from AOCI to retained earnings in the amount of $3.0 million related to the change in federal corporate tax rate. Premium Amortization on Purchased Callable Debt Securities – In March 2017, the FASB issued ASU No. 2017 - 08, Receivables – Nonrefundable Fees and Other Costs (Topic 310 - 20 ): Premium Amortization on Purchased Callable Debt Securities (“ASU 2017 - 08” ), that amends the amortization period for certain purchased callable debt securities held at a premium. Specifically, the amendments shorten the amortization period by requiring that the premium be amortized to the earliest call date. Under previous US GAAP, entities generally amortize the premium as an adjustment of yield over the contractual life of the instrument. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The effective date is for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. As permitted, we elected to early adopt the provisions of ASU 2017 - 08 during the first quarter 2017. The adoption of this standard did not have a material effect on our results of operations, financial position or disclosures. Employee Share-Based Payments – In March 2016, the FASB issued ASU No. 2016 - 09, Compensation – Stock Compensation (Topic 718 ): Improvements to Employee Share-Based Payment Accounting (“ASU 2016 - 09” ), which requires all excess tax benefits and tax deficiencies related to share-based payment awards be recognized as income tax expense or benefit in the income statement during the period in which they occur. Previously, such amounts were recorded in the pool of excess tax benefits included in additional paid-in capital, if such pool was available. Due to excess tax benefits no longer recognized in additional paid-in capital, the assumed proceeds from applying the treasury stock method when computing earnings per share should exclude the amount of excess tax benefits that would have previously been recognized in additional paid-in capital. Additionally, excess tax benefits should be classified along with other income tax cash flows as an operating activity rather than a financing activity, as was previously the case. ASU 2016 - 09 also provides that an entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current US GAAP) or account for forfeitures when they occur. ASU 2016 - 09 changes the threshold to qualify for equity classification (rather than as a liability) to permit withholding up to the maximum statutory tax rates (rather than the minimum as was previously the case) in the applicable jurisdictions. ASU 2016 - 09 became effective for annual and interim periods beginning after December 15, 2016. The prospective adoption of this standard has not had a material effect on our results of operations, financial position or disclosures. The impact of the requirement to report those income tax effects in earnings reduced reported federal and state income tax expense by approximately $1.7 million for the year ended December 31, 2017. Business Combinations: Pushdown Accounting - In September 2015, the FASB issued ASU 2015 - 16 – Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments (“ASU 2015 - 16” ). ASU 2015 - 16 requires entities to recognize measurement period adjustments during the reporting period in which the adjustments are determined. The income effects, if any, of a measurement period adjustment are cumulative and are to be reported in the period in which the adjustment to a provisional amount is determined. Also, ASU 2015 - 16 requires presentation on the face of the income statement or in the notes, the effect of the measurement period adjustment as if the adjustment had been recognized at acquisition date. ASU 2015 - 16 is effective for fiscal periods beginning after December 15, 2016 and should be applied prospectively to measurement period adjustments that occur after the effective date. The adoption of this standard did not have a material effect on the Company’s results of operations, financial position or disclosures. Business Combinations: Pushdown Accounting - In May 2015, the FASB issued ASU 2015 - 08 – Business Combinations: Pushdown Accounting – Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115 (“ASU 2015 - 08” ). ASU 2015 - 08 removes references to the SEC’s Staff Accounting Bulletin (SAB) Topic 5.J on pushdown accounting from ASC 805 - 50, thereby conforming the FASB’s guidance on pushdown accounting with the SEC’s guidance on this topic. ASU 2015 - 08 became effective upon issuance. The adoption of this standard did not have a material effect on the Company’s results of operations, financial position or disclosures. Consolidation Analysis - In February 2015, the FASB issued ASU 2015 - 02, Consolidation (Topic 810 ): Amendments to the Consolidation Analysis (“ASU 2015 - 02” ). ASU 2015 - 02 amends the consolidation requirements of ASU 810 by changing the consolidation analysis required under GAAP. The revised guidance amends the consolidation analysis based on certain fee arrangements or relationships to the reporting entity and, for limited partnerships, requires entities to consider the limited partner’s rights relative to the general partner. ASU 2015 - 02 became effective for annual and interim periods beginning after December 15, 2015. The adoption of this standard did not have a material effect on the Company’s results of operations, financial position or disclosures. Recently Issued Accounting Standards Derivatives and Hedging: Targeted Improvements – In August 2017, the FASB issued ASU No. 2017 - 12, Derivatives and Hedging (Topic 815 ): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017 - 12” ), that changes both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in order to better align a company’s risk management activities and financial reporting for hedging relationships. In summary, this amendment 1 ) expands the types of transactions eligible for hedge accounting; 2 ) eliminates the separate measurement and presentation of hedge ineffectiveness; 3 ) simplifies the requirements around the assessment of hedge effectiveness; 4 ) provides companies more time to finalize hedge documentation; and 5 ) enhances presentation and disclosure requirements. The effective date is for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. All transition requirements and elections should be applied to existing hedging relationships on the date of adoption and the effects should be reflected as of the beginning of the fiscal year of adoption. We are currently evaluating the impact this standard will have on our results of operations, financial position or disclosures, but it is not expected to have a material impact. Stock Compensation: Scope of Modification Accounting – In May 2017, the FASB issued ASU No. 2017 - 09, Compensation – Stock Compensation (Topic 718 ): Scope of Modification Accounting (“ASU 2017 - 09” ), that provides clarity and reduces both ( 1 ) diversity in practice and ( 2 ) cost and complexity when applying the guidance in Topic 718, to a change to the terms or conditions of a share-based payment award. An entity may change the terms or conditions of a share-based payment award for many different reasons, and the nature and effect of the change can vary significantly. The guidance clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting and the guidance should be applied prospectively to an award modified on or after the adoption date. ASU 2017 - 09 is effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted. The Company does not plan to modify any existing awards and therefore the adoption of ASU 2017 - 09 is not expected to have a significant impact on our financial position, results of operations, or disclosures. Goodwill Impairment – In January 2017, the FASB issued ASU No. 2017 - 04, Intangibles – Goodwill and Other (Topic 350 ): Simplifying the Test for Goodwill Impairment (“ASU 2017 - 04” ), that eliminates Step 2 from the goodwill impairment test which required entities to compare the implied fair value of goodwill to its carrying amount. Under the amendments, the goodwill impairment will be measured as the excess of the reporting unit’s carrying amount over its fair value. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The effective date is for fiscal years beginning after December 15, 2019, with early adoption permitted for interim or annual impairment tests beginning in 2017. ASU 2017 - 04 is not expected to have a material effect on our results of operations, financial position or disclosures. Statement of Cash Flows – In August 2016, the FASB issued ASU No. 2016 - 15, Statement of Cash Flows (Topic 230 ): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016 - 15” ), designed to address the diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows, including debt prepayment or extinguishment costs, settlement of certain debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, and distributions received from equity method investees. The amendments also provide guidance on when an entity should separate or aggregate cash flows based on the predominance principle. The effective date is for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The new standard is required to be applied retrospectively, but may be applied prospectively if retrospective application would be impracticable. Since the amendment applies to the classification of cash flows, no impact is anticipated on our financial position or results of operations. Additionally, we do not expect it to have a material impact on our financial statement disclosures. Credit Losses on Financial Instruments – In June 2016, the FASB issued ASU No. 2016 - 13, Financial Instruments – Credit Losses (Topic 326 ): Measurement of Credit Losses on Financial Instruments (“ASU 2016 - 13” ), which requires earlier measurement of credit losses, expands the range of information considered in determining expected credit losses and enhances disclosures. The main objective of ASU 2016 - 13 is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendments replace the incurred loss impairment methodology in current US GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The effective date for these amendments is for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We have formed a cross functional team that is assessing our data and system needs and evaluating the potential impact of adopting the new guidance. We anticipate a significant change in the processes and procedures to calculate the loan losses, including changes in assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. We expect to recognize a one -time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, but cannot yet determine the magnitude of any such one -time adjustment or the overall impact on our results of operations, financial position or disclosures. However, we have begun developing processes and procedures to ensure we are fully compliant at the required adoption date. Among other things, we have initiated data gathering and assessment to support forecasting of asset quality, loan balances, and portfolio net charge-offs and developing asset quality forecast models in preparation for the implementation of this standard. Leases – In February 2016, the FASB issued ASU No. 2016 - 02, Leases (Topic 842 ) (“ASU 2016 - 02” ), that establish the principles to report transparent and economically neutral information about the assets and liabilities that arise from leases. The new guidance results in a more consistent representation of the rights and obligations arising from leases by requiring lessees to recognize the lease asset and lease liabilities that arise from leases in the statement of financial position and to disclose qualitative and quantitative information about lease transactions, such as information about variable lease payments and options to renew and terminate leases. The effective date is for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Based upon leases that were outstanding as of December 31, 2017, we do not expect the new standard to have a material impact on our results of operations, but anticipate increases in our assets and liabilities. Decisions to repurchase, modify or renew leases prior to the implementation date will impact the level of materiality. Financial Assets and Financial Liabilities – In January 2016, the FASB issued ASU No. 2016 - 01, Financial Instruments – Overall (Subtopic 825 - 10 ): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016 - 01” ), that makes changes primarily affecting the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The effective date is for fiscal periods beginning after December 15, 2017, including interim periods within those fiscal years. ASU 2016 - 01 is not expected to have a material impact on the Company’s results of operations or financial position. However, this new guidance requires the disclosed fair value of our loan portfolio to be based on an exit price calculation, which considers liquidity, credit and nonperformance risk of our loans. We are completing our final assessment of this guidance but we do not expect a material impact on our fair value disclosures. Revenue Recognition – In May 2014, the FASB issued ASU No. 2014 - 09, Revenue from Contracts with Customers (Topic 606 ) (“ASU 2014 - 09” ), that outlines a single comprehensive revenue recognition model for entities to follow in accounting for revenue from contracts with customers. The core principle of this revenue model is that an entity should recognize revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive for those goods or services. In July 2015, the FASB issued ASU No. 2015 - 14, deferring the effective date to annual and interim periods beginning after December 15, 2017. The adoption of this standard is not expected to have a material effect on our results of operations, financial position or disclosures. The guidance does not apply to revenue associated with financial instruments, including loans and securities that are accounted for under other US GAAP, which comprises a significant portion of our revenue stream. From our analysis, we believe that for most revenue streams within the scope of ASU 2015 - 14, the amendments will not change the timing of when the revenue is recognized. ASU 2014 - 09 will require us to change how we recognize certain recurring revenue streams within trust and investment management fees and other insignificant components of non-interest income; however, these changes will not have a material impact on our results of operations or financial position. Additionally, although we do not expect a material impact, we do expect additional disclosures in our notes to the consolidated financial statements required by this guidance. Presently, the Company is not aware of any other changes to the Accounting Standards Codification that will have a material impact on the Company’s present or future financial position or results of operations.

NOTE

19:

NEW ACCOUNTING STANDARDS

Recently Adopted Accounting Standards

Reporting Comprehensive Income

– In

February 2018,

the FASB issued ASU

No.

2018

02,

Income Statement-Reporting Comprehensive Income (Topic

220

)

(“ASU

2018

02”

), that allows a reclassification from AOCI to retained earnings for stranded tax effects resulting from the

2017

Act. Current US GAAP requires the remeasurement of deferred tax assets and liabilities as a result of a change in tax laws or rates to be presented in net income from continuing operations. Consequently, the original deferred tax amount recorded through AOCI at the old rate will remain in AOCI despite the fact that its related deferred tax asset/liability will be reduced through continuing operations to reflect the new rate, resulting in “stranded” tax effects in AOCI. ASU

2018

requires a reclassification from AOCI to retained earnings for those stranded tax effects resulting from the newly enacted federal corporate income tax rate. The amount of reclassification would be the difference between

) the amount initially charged or credited directly to other comprehensive income at the previous enacted federal corporate income tax rate that remains in AOCI and

) the amount that would have been charged or credited using the newly enacted federal corporate income tax rate, excluding the effect of any valuation allowance previously charged to income from continuing operations. The effective date is for fiscal years beginning after

December 15, 2018,

including interim periods within those fiscal years. As permitted, we elected to early adopt the provisions of ASU

2018

during the

fourth

quarter

2017,

which resulted in a reclassification from AOCI to retained earnings in the amount of

$3.0

million related to the change in federal corporate tax rate.

Premium Amortization on Purchased Callable Debt Securities

– In

March 2017,

the FASB issued ASU

No.

2017

08,

Receivables – Nonrefundable Fees and Other Costs (Topic

310

): Premium Amortization on Purchased Callable Debt Securities

(“ASU

2017

08”

), that amends the amortization period for certain purchased callable debt securities held at a premium. Specifically, the amendments shorten the amortization period by requiring that the premium be amortized to the earliest call date. Under previous US GAAP, entities generally amortize the premium as an adjustment of yield over the contractual life of the instrument. The amendments do

not

require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The effective date is for fiscal years beginning after

December 15, 2018,

including interim periods within those fiscal years. As permitted, we elected to early adopt the provisions of ASU

2017

during the

first

quarter

2017.

The adoption of this standard did

not

have a material effect on our results of operations, financial position or disclosures.

Employee Share-Based Payments

– In

March 2016,

the FASB issued ASU

No.

2016

09,

Compensation – Stock Compensation (Topic

718

): Improvements to Employee Share-Based Payment Accounting

(“ASU

2016

09”

), which requires all excess tax benefits and tax deficiencies related to share-based payment awards be recognized as income tax expense or benefit in the income statement during the period in which they occur. Previously, such amounts were recorded in the pool of excess tax benefits included in additional paid-in capital, if such pool was available. Due to excess tax benefits

longer recognized in additional paid-in capital, the assumed proceeds from applying the treasury stock method when computing earnings per share should exclude the amount of excess tax benefits that would have previously been recognized in additional paid-in capital. Additionally, excess tax benefits should be classified along with other income tax cash flows as an operating activity rather than a financing activity, as was previously the case. ASU

2016

also provides that an entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current US GAAP) or account for forfeitures when they occur. ASU

2016

changes the threshold to qualify for equity classification (rather than as a liability) to permit withholding up to the maximum statutory tax rates (rather than the minimum as was previously the case) in the applicable jurisdictions. ASU

2016

became effective for annual and interim periods beginning after

December 15, 2016.

The prospective adoption of this standard has

not

had a material effect on our results of operations, financial position or disclosures. The impact of the requirement to report those income tax effects in earnings reduced reported federal and state income tax expense by approximately

$1.7

million for the year ended

December 31, 2017.

Business Combinations: Pushdown Accounting

- In

September 2015,

the FASB issued ASU

2015

–

Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments

(“ASU

2015

16”

). ASU

2015

requires entities to recognize measurement period adjustments during the reporting period in which the adjustments are determined. The income effects, if any, of a measurement period adjustment are cumulative and are to be reported in the period in which the adjustment to a provisional amount is determined. Also, ASU

2015

requires presentation on the face of the income statement or in the notes, the effect of the measurement period adjustment as if the adjustment had been recognized at acquisition date. ASU

2015

is effective for fiscal periods beginning after

December 15, 2016

and should be applied prospectively to measurement period adjustments that occur after the effective date. The adoption of this standard did

not

have a material effect on the Company’s results of operations, financial position or disclosures.

Business Combinations: Pushdown Accounting

- In

May 2015,

the FASB issued ASU

2015

–

Business Combinations: Pushdown Accounting – Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin

No.

115

(“ASU

2015

08”

). ASU

2015

removes references to the SEC’s Staff Accounting Bulletin (SAB) Topic

5.J

on pushdown accounting from ASC

805

50,

thereby conforming the FASB’s guidance on pushdown accounting with the SEC’s guidance on this topic. ASU

2015

became effective upon issuance. The adoption of this standard did

not

have a material effect on the Company’s results of operations, financial position or disclosures.

Consolidation Analysis

- In

February 2015,

the FASB issued ASU

2015

02,

Consolidation (Topic

810

): Amendments to the Consolidation Analysis

(“ASU

2015

02”

). ASU

2015

amends the consolidation requirements of ASU

810

by changing the consolidation analysis required under GAAP. The revised guidance amends the consolidation analysis based on certain fee arrangements or relationships to the reporting entity and, for limited partnerships, requires entities to consider the limited partner’s rights relative to the general partner. ASU

2015

became effective for annual and interim periods beginning after

December 15, 2015.

The adoption of this standard did

not

have a material effect on the Company’s results of operations, financial position or disclosures.

Recently Issued Accounting Standards

Derivatives and Hedging: Targeted Improvements

– In

August 2017,

the FASB issued ASU

No.

2017

12,

Derivatives and Hedging (Topic

815

): Targeted Improvements to Accounting for Hedging

Activities (“ASU

2017

12”

), that changes both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in order to better align a company’s risk management activities and financial reporting for hedging relationships. In summary, this amendment

) expands the types of transactions eligible for hedge accounting;

) eliminates the separate measurement and presentation of hedge ineffectiveness;

) simplifies the requirements around the assessment of hedge effectiveness;

) provides companies more time to finalize hedge documentation; and

) enhances presentation and disclosure requirements. The effective date is for fiscal years beginning after

December 15, 2018,

and interim periods within those fiscal years, with early adoption permitted. All transition requirements and elections should be applied to existing hedging relationships on the date of adoption and the effects should be reflected as of the beginning of the fiscal year of adoption. We are currently evaluating the impact this standard will have on our results of operations, financial position or disclosures, but it is

not

expected to have a material impact.

Stock Compensation: Scope of Modification Accounting

– In

May 2017,

the FASB issued ASU

No.

2017

09,

Compensation – Stock Compensation (Topic

718

): Scope of Modification Accounting

(“ASU

2017

09”

), that provides clarity and reduces both (

) diversity in practice and (

) cost and complexity when applying the guidance in Topic

718,

to a change to the terms or conditions of a share-based payment award. An entity

may

change the terms or conditions of a share-based payment award for many different reasons, and the nature and effect of the change can vary significantly. The guidance clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting and the guidance should be applied prospectively to an award modified on or after the adoption date. ASU

2017

is effective for interim and annual reporting periods beginning after

December 15, 2017,

with early adoption permitted. The Company does

not

plan to modify any existing awards and therefore the adoption of ASU

2017

not

expected to have a significant impact on our financial position, results of operations, or disclosures.

Goodwill Impairment

– In

January 2017,

the FASB issued ASU

No.

2017

04,

Intangibles – Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment

(“ASU

2017

04”

), that eliminates Step

from the goodwill impairment test which required entities to compare the implied fair value of goodwill to its carrying amount. Under the amendments, the goodwill impairment will be measured as the excess of the reporting unit’s carrying amount over its fair value. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should

not

exceed the total amount of goodwill allocated to that reporting unit. The effective date is for fiscal years beginning after

December 15, 2019,

with early adoption permitted for interim or annual impairment tests beginning in

2017.

ASU

2017

not

expected to have a material effect on our results of operations, financial position or disclosures.

Statement of Cash Flows

– In

August 2016,

the FASB issued ASU

No.

2016

15,

Statement of Cash Flows (Topic

230

): Classification of Certain Cash Receipts and Cash Payments

(“ASU

2016

15”

), designed to address the diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows, including debt prepayment or extinguishment costs, settlement of certain debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, and distributions received from equity method investees. The amendments also provide guidance on when an entity should separate or aggregate cash flows based on the predominance principle. The effective date is for fiscal years beginning after

December 15, 2017,

including interim periods within those fiscal years. The new standard is required to be applied retrospectively, but

may

be applied prospectively if retrospective application would be impracticable. Since the amendment applies to the classification of cash flows,

impact is anticipated on our financial position or results of operations. Additionally, we do

not

expect it to have a material impact on our financial statement disclosures.

Credit Losses on Financial Instruments

– In

June 2016,

the FASB issued ASU

No.

2016

13,

Financial Instruments – Credit Losses (Topic

326

): Measurement of Credit Losses on Financial Instruments

(“ASU

2016

13”

), which requires earlier measurement of credit losses, expands the range of information considered in determining expected credit losses and enhances disclosures. The main objective of ASU

2016

is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendments replace the incurred loss impairment methodology in current US GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The effective date for these amendments is for fiscal years beginning after

December 15, 2019,

including interim periods within those fiscal years. We have formed a cross functional team that is assessing our data and system needs and evaluating the potential impact of adopting the new guidance. We anticipate a significant change in the processes and procedures to calculate the loan losses, including changes in assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. We expect to recognize a

one

-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the

first

reporting period in which the new standard is effective, but cannot yet determine the magnitude of any such

one

-time adjustment or the overall impact on our results of operations, financial position or disclosures. However, we have begun developing processes and procedures to ensure we are fully compliant at the required adoption date. Among other things, we have initiated data gathering and assessment to support forecasting of asset quality, loan balances, and portfolio net charge-offs and developing asset quality forecast models in preparation for the implementation of this standard.

Leases

– In

February 2016,

the FASB issued ASU

No.

2016

02,

Leases (Topic

842

)

(“ASU

2016

02”

), that establish the principles to report transparent and economically neutral information about the assets and liabilities that arise from leases. The new guidance results in a more consistent representation of the rights and obligations arising from leases by requiring lessees to recognize the lease asset and lease liabilities that arise from leases in the statement of financial position and to disclose qualitative and quantitative information about lease transactions, such as information about variable lease payments and options to renew and terminate leases. The effective date is for fiscal years beginning after

December 15, 2018,

including interim periods within those fiscal years. Based upon leases that were outstanding as of

December 31, 2017,

we do

not

expect the new standard to have a material impact on our results of operations, but anticipate increases in our assets and liabilities. Decisions to repurchase, modify or renew leases prior to the implementation date will impact the level of materiality.

Financial Assets and Financial Liabilities

– In

January 2016,

the FASB issued ASU

No.

2016

01,

Financial Instruments – Overall (Subtopic

825

): Recognition and Measurement of Financial Assets and Financial Liabilities

(“ASU

2016

01”

), that makes changes primarily affecting the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The effective date is for fiscal periods beginning after

December 15, 2017,

including interim periods within those fiscal years. ASU

2016

not

expected to have a material impact on the Company’s results of operations or financial position. However, this new guidance requires the disclosed fair value of our loan portfolio to be based on an exit price calculation, which considers liquidity, credit and nonperformance risk of our loans. We are completing our final assessment of this guidance but we do

not

expect a material impact on our fair value disclosures.

Revenue Recognition

– In

May 2014,

the FASB issued ASU

No.

2014

09,

Revenue from Contracts with Customers (Topic

606

)

(“ASU

2014

09”

), that outlines a single comprehensive revenue recognition model for entities to follow in accounting for revenue from contracts with customers. The core principle of this revenue model is that an entity should recognize revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive for those goods or services. In

July 2015,

the FASB issued ASU

No.

2015

14,

deferring the effective date to annual and interim periods beginning after

December 15, 2017.

The adoption of this standard is

not

expected to have a material effect on our results of operations, financial position or disclosures. The guidance does

not

apply to revenue associated with financial instruments, including loans and securities that are accounted for under other US GAAP, which comprises a significant portion of our revenue stream. From our analysis, we believe that for most revenue streams within the scope of ASU

2015

14,

the amendments will

not

change the timing of when the revenue is recognized. ASU

2014

will require us to change how we recognize certain recurring revenue streams within trust and investment management fees and other insignificant components of non-interest income; however, these changes will

not

have a material impact on our results of operations or financial position. Additionally, although we do

not

expect a material impact, we do expect additional disclosures in our notes to the consolidated financial statements required by this guidance.

Presently, the Company is

not

aware of any other changes to the Accounting Standards Codification that will have a material impact on the Company’s present or future financial position or results of operations.