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Note 2 - Basis of Presentation | 3 Months Ended
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Mar. 31, 2017
Notes to Financial Statements |
Significant Accounting Policies [Text Block] |
2. | BASIS OF PRESENTATION
Summary of Significant Accounting Policies Certain significant accounting policies followed by the Company are set forth in Note 2, “Summary of Significant Accounting Policies,” of the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10 -K as of and for the year ended December 31, 2016. Net Income Per Share and Comprehensive Income Basic net income per share is computed by dividing net income by the weighted average number of shares of common stock outstanding. 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. 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 |
|  | March 31, |
|  | 2017 |  |  | 2016 |
Basic shares |  |  | 6,158,399 |  |  |  | 6,143,267 |
Dilutive shares |  |  | 320,500 |  |  |  | 272,550 |
Diluted shares |  |  | 6,478,899 |  |  |  | 6,415,817 |
|  | Three Months Ended |
|  | March 31, |
|  | 2017 |  |  | 2016 |
|  | (Dollars in Thousands, Except Per Share Data) |
Net income |  | $ | 404 |  |  | $ | 317 |
Basic net income per share |  | $ | 0.07 |  |  | $ | 0.05 |
Diluted net income per share |  | $ | 0.06 |  |  | $ | 0.05 |
Comprehensive income consists of net income, as well as unrealized 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 or changes in the fair value of cash flow derivatives. Accounting Policies Recently Adopted and Pending Accounting Pronouncements Accounting Standards Update (“ ASU”) 2016 - 13, "Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments .” Issued in June 2016, ASU 2016 - 13 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 - 13 also amends the credit loss measurement guidance for available-for-sale debt securities. For public business entities, ASU 2016 - 13 is effective for financial statements issued for fiscal years and for interim periods within those fiscal years beginning after December 15, 2019. 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 - 09, “ Compensation-Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting.” Issued in March 2016, ASU 2016 - 09 seeks to reduce complexity in accounting standards by simplifying several aspects of the accounting for share-based payment transactions, including (1) accounting for income taxes; (2) classification of excess tax benefits on the statement of cash flows; (3) forfeitures; (4) minimum statutory tax withholding requirements; (5) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax withholding purposes; (6) the practical expedient for estimating the expected term; and (7) intrinsic value. ASU 2016 - 09 became effective for the Company on January 1, 2017. The adoption of ASU 2016 - 09 did not have a material impact on the Company’s consolidated financial statements. ASU 2016 - 05, “ Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships.” Issued in March 2016, ASU 2016 - 05 clarifies that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 815 does not, in and of itself, require de-designation of that hedging relationship, provided that all other hedge accounting criteria continue to be met. ASU 2016 - 05 became effective for the Company on January 1, 2017. The adoption of ASU 2016 - 05 did not have a material impact on the Company’s consolidated financial statements. ASU 2016 - 02, “ Leases (Topic 842).” Issued in February 2016, ASU 2016 - 02 was issued by the 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 - 02 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 12 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 - 02 is effective for fiscal years beginning after December 15, 2018. Management is currently evaluating the impact that this ASU will have on the Company’s consolidated financial statements. ASU 2016 - 01, “ Financial Instruments - Overall (Subtopic 825 - 10): Recognition and Measurement of Financial Assets and Financial Liabilities (An Amendment of FASB ASC 825).” Issued in January 2016, ASU 2016 - 01 is 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 - 01 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. The amendments of ASU 2016 - 01 are effective for interim and annual periods beginning after December 15, 2017. Management is currently evaluating the impact that this ASU will have on the Company’s consolidated financial statements. ASU 2014 - 09, “ Revenue from Contracts with Customers (Topic 606 ).” Issued in May 2014, ASU 2014 - 09 will add FASB ASC Topic 606, Revenue from Contracts with Customers, and will supersede revenue recognition requirements in FASB ASC Topic 605, Revenue Recognition and certain cost guidance in FASB ASC Topic 605 - 35, Revenue Recognition – Construction-Type and Production-Type Contracts. ASU 2014 - 09 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 2015 - 14 , “Revenue from Contracts with Customers (Topic 606) - Deferral of the Effective Date,” issued in August 2015, defers the effective date of ASU 2014 - 09 by one year. ASU 2015 - 14 provides that the amendments of ASU 2014 - 09 become effective for interim and annual periods beginning after December 15, 2017. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Management is currently evaluating the impact that this ASU will have on the Company’s consolidated financial statements, as well as the most appropriate method of application. However, because this guidance does not significantly impact the treatment of revenue associated with financial instruments, including loans and securities accounted for under other U.S. GAAP, the adoption of ASU 2014 - 09 is not expected to have a material impact on the Company’s consolidated financial statements.

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