PARENT COMPANY FINANCIAL INFORMATION

12 Months Ended

Dec. 31, 2018

Condensed Financial Information Disclosure [Abstract]

Condensed Financial Information of Parent Company Only Disclosure [Text Block]

27. PARENT COMPANY FINANCIAL INFORMATION

The parent company functions primarily as a coordinating and servicing unit for all subsidiary entities. Provided services include general management, accounting and taxes, loan review, internal auditing, investment advisory, marketing, insurance, risk management, general corporate services, and financial and strategic planning. The following financial information relates only to the parent company operations:

BALANCE SHEETS

	AT DECEMBER 31,
	2018		2017
	(IN THOUSANDS)
ASSETS
Cash	$	100	$	100
Short-term investments in money market funds		3,711		4,521
Investment securities available for sale		4,747		5,307
Equity investment in banking subsidiary		103,647		99,408
Equity investment in non-banking subsidiaries		6,745		6,444
Other assets		208		499
TOTAL ASSETS	$	119,158	$	116,279
LIABILITIES
Guaranteed junior subordinated deferrable interest debentures	$	12,939	$	12,923
Subordinated debt		7,488		7,465
Other liabilities		754		789
TOTAL LIABILITIES		21,181		21,177
STOCKHOLDERS’ EQUITY
Total stockholders’ equity		97,977		95,102
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	119,158	$	116,279

STATEMENTS OF OPERATIONS

	YEAR ENDED DECEMBER 31,
	2018			2017			2016
	(IN THOUSANDS)
INCOME
Inter-entity management and other fees	$	2,430		$	2,315		$	2,305
Dividends from banking subsidiary		3,500			2,850			3,000
Dividends from non-banking subsidiaries		1,190			840			650
Interest, dividend and other income		119			163			214
TOTAL INCOME		7,239			6,168			6,169
EXPENSE
Interest expense		1,642			1,642			1,640
Salaries and employee benefits		2,610			2,416			2,314
Other expense		1,733			1,618			1,549
TOTAL EXPENSE		5,985			5,676			5,503
INCOME BEFORE INCOME TAXES AND EQUITY IN UNDISTRIBUTED EARNINGS OF SUBSIDIARIES		1,254			492			666
Benefit for income taxes		(722	)		(1,114	)		(1,015	)
Equity in undistributed earnings of subsidiaries		5,792			1,687			629
NET INCOME	$	7,768		$	3,293		$	2,310
COMPREHENSIVE INCOME (LOSS)	$	6,493		$	4,051		$	(1,712	)

STATEMENTS OF CASH FLOWS

	YEAR ENDED DECEMBER 31,
	2018			2017			2016
	(IN THOUSANDS)
OPERATING ACTIVITIES
Net income	$	7,768		$	3,293		$	2,310
Adjustment to reconcile net income to net cash provided by operating activities:
Equity in undistributed earnings of subsidiaries		(5,792	)		(1,687	)		(629	)
Stock compensation expense, net of tax		14			13			20
Other – net		433			1,325			1,463
NET CASH PROVIDED BY OPERATING ACTIVITIES		2,423			2,944			3,164
INVESTING ACTIVITIES
Purchase of investment securities – available for sale		(1,002	)		(1,002	)		(996	)
Proceeds from maturity and sales of investment securities – available for sale		1,462			1,699			3,396
NET CASH PROVIDED BY INVESTING ACTIVITIES		460			697			2,400
FINANCING ACTIVITIES
Preferred stock redemption		—			—			(21,000	)
Preferred stock dividends paid		—			—			(15	)
Purchases of treasury stock		(2,346	)		(3,404	)		—
Common stock dividends paid		(1,347	)		(1,113	)		(945	)
NET CASH USED IN FINANCING ACTIVITIES		(3,693	)		(4,517	)		(21,960	)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(810	)		(876	)		(16,396	)
CASH AND CASH EQUIVALENTS AT JANUARY 1		4,621			5,497			21,893
CASH AND CASH EQUIVALENTS AT DECEMBER 31	$	3,811		$	4,621		$	5,497

The ability of the subsidiary Bank to upstream cash to the parent company is restricted by regulations. Federal law prevents the parent company from borrowing from its subsidiary Bank unless the loans are secured by specified assets. Further, such secured loans are limited in amount to ten percent of the subsidiary Bank’s capital and surplus. In addition, the Bank is subject to legal limitations on the amount of dividends that can be paid to its shareholder. The dividend limitation generally restricts dividend payments to a bank’s retained net income for the current and preceding two calendar years. Cash may also be upstreamed to the parent company by the subsidiaries as an inter-entity management fee. The subsidiary Bank had a combined $107,849,000 of restricted surplus and retained earnings at December 31, 2018.