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NON-INTEREST INCOME (Tables) | 12 Months Ended
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Dec. 31, 2018
Revenue from Contract with Customer [Abstract] |
Financial Statement Impact | The following table provides a brief description of accounting standards that could have a material impact to the Company’s consolidated financial statements upon adoption:
Standard | Description | Required Date of Adoption | Effect on financial statements
Standards Adopted in 2018
ASU 2014-09, Revenue from Contracts with Customers | This ASU supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry topics of the Codification. The core principle of the ASU is an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU may be adopted either retrospectively or on a modified retrospective basis. | January 1, 2018 | The Company adopted this ASU as of January 1, 2018, upon completion of an analysis to identify all revenue streams within the scope of this accounting guidance. After reviewing the related contracts as prescribed by the five steps within this ASU, one contract resulted in recognition of a $241 thousand liability with a $184 thousand impact to retained earnings net of tax. The remaining changes had no material impact on the consolidated financial statements. See Note 11 for more detail and transitional disclosures.
ASU 2015-14, Deferral of the Effective Date
ASU 2016-08, Principal versus Agent Considerations
ASU 2016-10, Identifying Performance Obligations and Licensing
ASU 2016-12, Narrow-Scope Improvements and Practical Expedience
ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers
ASU 2016-01, Recognition and Measurement of Financial Assets and Liabilities | This ASU amends ASC Topic 825, Financial Instruments-Overall, and addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Among other minor amendments applicable to the Company, the main provisions require investments in equity securities to be measured at fair value with changes in fair value recognized through net income unless they qualify for a practicability exception (excludes investments accounted for under the equity method of accounting or those that result in consolidation of the investee). Except for disclosure requirements that will be adopted prospectively, the ASU must be adopted on a modified retrospective basis. | January 1, 2018 | The Company adopted this ASU as of January 1, 2018, although it did not have any equity securities that would be in scope of this ASU. However, the Company is subject to the exit pricing notion required in fair value disclosures and after calculating the fair value, the Company had no material impact to its consolidated financial statements.
ASU-2018-03, Technical Corrections and Improvements to Financial Instruments
ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments | This ASU amends Topic 230, Statement of Cash Flows, and provides clarification with respect to classification within the statement of cash flows where current guidance is unclear or silent. The ASU should be adopted retrospectively. If it is impractical to apply the guidance retrospectively for an issue, the amendments related to the issue would be applied prospectively. | January 1, 2018 | The Company adopted this ASU as of January 1, 2018, although it did not have a material impact on the Company's consolidated financial statements.
Standard | Description | Required Date of Adoption | Effect on financial statements
Standards Adopted in 2018 (continued)
ASU 2017-07, Compensation- Retirement Benefits | This ASU amends Topic 715, Retirement Benefits, and provides more prescriptive guidance around the presentation of net period pension and post-retirement benefit cost in the income statement. The amendment requires the service cost component be disaggregated from other components of net periodic benefit cost in the income statement. | January 1, 2018 | The Company adopted this ASU as of January 1, 2018, although it did not have a material impact on the Company's consolidated financial statements.
Early adoption is permitted.
ASU 2017-09, Stock Compensation: Scope of Modification Accounting | This ASU amends Topic 718, Compensation- Stock Compensation, and clarifies when modification accounting should be applied to changes in terms or conditions of share-based payment awards. The amendments narrow the scope of modification accounting by clarifying that modification accounting should be applied to awards if the change affects the fair value, vesting conditions, or classification of the award. The amendments do not impact current disclosure requirements for modifications, regardless of whether modification accounting is required under the new guidance. | January 1, 2018 | The Company adopted this ASU as of January 1, 2018, although it did not have a material impact on the Company's consolidated financial statements.
ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income | The ASU amends Topic 220, Income Statement-Reporting Comprehensive Income, and is intended to help organizations reclassify certain stranded income tax effects in accumulated other comprehensive income resulting from the recently enacted Tax Reform. The guidance allows entities to reclassify stranded tax effects in accumulated other comprehensive income to retained earnings. | January 1, 2019 | The Company adopted this ASU as of March 31, 2018. The effect of the reclassification resulted in an increase to retained earnings and a decrease to accumulated other comprehensive income of $980 thousand with zero net effect on total stockholders' equity.
ASU 2018-05, Income Taxes (Topic 740) SEC Amendments | Early adoption is permitted.
ASU 2018-06, Codification Improvements to Topic 942, Financial Services - Depository and Lending | Circular 202, issued on July 2, 1985, was rescinded by the Office of the Comptroller of the Currency. The circular limited the net deferred tax debits that could be carried on the Company's balance sheet for regulatory purposes to the amount that would be coverable by the net operating loss carrybacks. The language is no longer relevant and has been removed from the guidance. | May 2018 | The Company adopted this ASU as of January 1, 2018, although it did not have a material impact on the Company's consolidated financial statements.
Standard | Description | Required Date of Adoption | Effect on financial statements
Standards Not Yet Adopted
ASU 2016-02, Leases | This ASU creates ASU Topic 842, Leases, and supersedes Topic 840, Leases. The new guidance requires lessees to record a right-of-use asset and a corresponding liability equal to the present value of future rental payments on their balance sheets for all leases with a term greater than one year. There are not significant changes to lessor accounting; however, there are certain improvements made to align lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. This guidance expands both quantitative and qualitative required disclosures. This ASU is required to be adopted on a modified retrospective basis and allows for practical expedients and elections in conjunction with implementation. The Company may elect some of the expedients upon the adoption date, which may be applied prospectively or retrospectively. | January 1, 2019 | The Company plans to elect the practical expedients, allowing for existing leases to be accounted for consistent with current guidance, with the exception of balance sheet recognition for lessees. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. The Company will use the effective date as the initial date of application. At adoption the Company expects to recognize a right-of-use asset and corresponding lease liability of $9.0 million. This estimate is based, primarily, on the present value of unpaid future minimum lease payments. Additionally, that amount is impacted by assumptions around renewals and/or extensions, and the interest rate used to discount those future lease obligations. Due to the limited size of the Company's leasing portfolio, many other items related to this standard don't apply, or have an immaterial impact on the Company's consolidated financial statements.
ASU 2018-11 Practical Expedients to Topic 842, Leases
ASU 2018-02 Scope Improvements for Lessors
ASU 2016-13, Measurement of Credit Losses on Financial Instruments | This ASU amends Topic 326, Financial Instruments- Credit Losses to replace the current incurred loss accounting model with a current expected credit loss approach (CECL) for financial instruments measured at amortized cost and other commitments to extend credit. The amendments require entities to consider all available relevant information when estimating current expected credit losses, including details about past events, current conditions, and reasonable and supportable forecasts. The resulting allowance for credit losses is to reflect the portion of the amortized cost basis that the entity does not expect to collect. The amendments also eliminate the current accounting model for purchased credit impaired loans and debt securities. Additional quantitative and qualitative disclosures are required upon adoption. | January 1, 2020 | Adoption of this ASU is expected to primarily change how the Company estimates credit losses with the application of the expected credit loss model. In addition, the Company expects the ASU to change the presentation of credit losses for AFS debt securities through an allowance method rather than as a direct write-off. The Company is in the process of evaluating loan loss estimation models to comply with the guidance under this ASU, which may result in a higher credit loss estimate.
ASU 2018-19, Codification Improvements to ASU 2016-13
| While the CECL model does not apply to available for sale debt securities, the ASU does require entities to record an allowance when recognizing credit losses for available for sale securities, rather than reduce the amortized cost of the securities by direct write-offs.
| The ASU should be adopted on a modified retrospective basis. Entities that have loans accounted for under ASC 310-30 at the time of adoption should prospectively apply the guidance in this amendment for purchase credit deteriorated assets. | Early adoption is permitted in 2019
Standard | Description | Required Date of Adoption | Effect on financial statements
Standards Not Yet Adopted (continued)
ASU 2017-04, Simplifying the Test for Goodwill Impairment | This ASU amends Topic 350, Intangibles-Goodwill and Other, and eliminates Step 2 from the goodwill impairment test. | January 1, 2020 | Adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.
Early adoption is permitted.
ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities | This ASU amends ASC 815, Derivatives and Hedging to (1) improve the transparency and understandability of information conveyed to financial statement users about an entity's risk management activities by better aligning the entity's financial reporting for hedging relationships with those risk management activities and (2) reduce the complexity of and simplify the application of hedge accounting by preparers. | January 1, 2019 | Adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.
ASU 2018-16, Inclusion of Overnight Financing Rate or Overnight Swap Rate as a Benchmark for Hedge Accounting
ASU 2018-07, Share Based Payment Accounting | This ASU expands the scope of Topic 718, Compensation- Stock Compensation to include share-based payments issued to non-employees for goods or services. Consequently, the accounting for share-based payments to non-employees and employees will be substantially aligned. The ASU supersedes Subtopic 505-50, Equity-Based Payments to non-employees. | January 1, 2019 | Adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements as the Company does not participate in these types of arrangements in the normal course of business, except for board director compensation.
ASU 2018-13 Changes to Disclosure Requirements Fair Value Measurement, Topic 820 | This ASU eliminates, adds and modifies certain disclosure requirements for fair value measurements. Among the changes, entities will no longer be required to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. | January 1, 2020 | The Company is currently evaluating this guidance to determine any impact on the Company's consolidated financial statements.
Early adoption is permitted.
ASU 2018-14 Compensation- Disclosure Requirements for Defined Pension Plans Topic 715-20 | This ASU makes minor changes to the disclosure requirements for employers that sponsor defined benefit pension and/or other post-retirement benefit plans. | January 1, 2021 | The Company is currently evaluating this guidance to determine any impact on the Company's consolidated financial statements.
Early adoption is permitted.
Financial Statement Impact The cumulative effect of the changes made to the consolidated January 1, 2018 balance sheet for the adoption were as follows:
(in thousands) |  | Balance at December 31, 2017 |  | Adjustments due to Topic 606 |  | Balance at January 1, 2018
Balance Sheet |  |  |  |  |  |
Other Assets |  | $ | 24,389 |  |  | $ | 57 |  |  | $ | 24,446 |
Other Liabilities |  | 28,737 |  |  | 241 |  |  | 28,978 |
Retained Earnings |  | 144,977 |  |  | (184 | ) |  | 144,793 |
Disaggregation of Revenue | Disaggregation of Revenue The following tables disaggregates the Company’s revenue by major business line and timing of transfer of products or services:
(in thousands) |  | Twelve Months Ended December 31, 2018
Major Products/Service Lines |  |
Trust management fees |  | $ | 11,017 |
Financial services fees |  | 968 |
Interchange fees |  | 4,434 |
Customer deposit fees |  | 3,800 |
Other customer service fees |  | 1,304 |
Total |  | $ | 21,523 |
(in thousands) |  | Twelve Months Ended December 31, 2018
Timing of Revenue Recognition |  |
Products and services transferred at a point in time |  | $ | 9,766 |
Products and services transferred over time |  | 11,757 |
Total |  | $ | 21,523 |
Contract Balances with Customer | Contract Balances with Customers The following table provides information about receivables, contract assets, and deferred revenues from contracts with customers.
(in thousands) |  | Balance at December 31, 2018 |  | Balance at December 31, 2017
Other Assets |  | $ | 2,866 |  |  | $ | 972 |
Other Liabilities |  | 4,923 |  |  | 342 |

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