2018 Q4 Form 10-Q Financial Statement

#000114420418058571 Filed on November 09, 2018

View on sec.gov

Income Statement

Concept 2018 Q4 2018 Q3 2017 Q3
Revenue $6.139M $6.129M $5.457M
YoY Change 13.79% 12.31%
Cost Of Revenue
YoY Change
Gross Profit
YoY Change
Gross Profit Margin
Selling, General & Admin
YoY Change
% of Gross Profit
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $250.0K $220.0K $180.0K
YoY Change 25.0% 22.22% 0.0%
% of Gross Profit
Operating Expenses
YoY Change
Operating Profit
YoY Change
Interest Expense $1.001M $950.0K $752.0K
YoY Change 29.33% 26.33%
% of Operating Profit
Other Income/Expense, Net $4.859M $4.847M $4.442M
YoY Change 0.77% 9.12%
Pretax Income $1.030M $1.356M $1.333M
YoY Change 9.93% 1.73% -16.69%
Income Tax -$187.0K -$29.00K $127.0K
% Of Pretax Income -18.16% -2.14% 9.53%
Net Earnings $1.217M $1.385M $1.206M
YoY Change 110.55% 14.84% -16.83%
Net Earnings / Revenue 19.82% 22.6% 22.1%
Basic Earnings Per Share $0.24 $0.27 $0.25
Diluted Earnings Per Share $0.24 $0.27 $0.25
COMMON SHARES
Basic Shares Outstanding 5.094M 5.094M 4.768M
Diluted Shares Outstanding 5.120M 4.779M

Balance Sheet

Concept 2018 Q4 2018 Q3 2017 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments
YoY Change
Cash & Equivalents $16.46M $15.33M $13.35M
Short-Term Investments
Other Short-Term Assets
YoY Change
Inventory
Prepaid Expenses
Receivables
Other Receivables
Total Short-Term Assets
YoY Change
LONG-TERM ASSETS
Property, Plant & Equipment $8.744M $8.659M $6.700M
YoY Change -1.61% 29.24% -2.9%
Goodwill $9.139M $9.139M
YoY Change 67.75%
Intangibles
YoY Change
Long-Term Investments $0.00 $0.00 $4.800M
YoY Change -100.0% -100.0% 2.13%
Other Assets
YoY Change
Total Long-Term Assets
YoY Change
TOTAL ASSETS
Total Short-Term Assets
Total Long-Term Assets
Total Assets $625.2M $620.7M $599.9M
YoY Change 5.62% 3.47% 3.97%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $5.000M $4.600M $6.600M
YoY Change -23.08% -30.3% -1.49%
Accrued Expenses
YoY Change
Deferred Revenue
YoY Change
Short-Term Debt $14.51M $5.300M $6.800M
YoY Change -33.34% -22.06% 0.0%
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $5.000M $4.600M $6.600M
YoY Change -23.08% -30.3% -1.49%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00 $0.00
YoY Change
Other Long-Term Liabilities
YoY Change
Total Long-Term Liabilities $0.00 $0.00 $0.00
YoY Change
TOTAL LIABILITIES
Total Short-Term Liabilities $5.000M $4.600M $6.600M
Total Long-Term Liabilities $0.00 $0.00 $0.00
Total Liabilities $557.9M $555.3M $539.5M
YoY Change 4.75% 2.93% 4.78%
SHAREHOLDERS EQUITY
Retained Earnings $42.53M $42.02M
YoY Change 4.03%
Common Stock $5.134M $5.134M
YoY Change 6.71%
Preferred Stock
YoY Change
Treasury Stock (at cost) $803.0K $773.0K
YoY Change -3.37%
Treasury Stock Shares $42.20K $40.71K
Shareholders Equity $67.38M $65.38M $60.45M
YoY Change
Total Liabilities & Shareholders Equity $625.2M $620.7M $599.9M
YoY Change 5.62% 3.47% 3.97%

Cashflow Statement

Concept 2018 Q4 2018 Q3 2017 Q3
OPERATING ACTIVITIES
Net Income $1.217M $1.385M $1.206M
YoY Change 110.55% 14.84% -16.83%
Depreciation, Depletion And Amortization $250.0K $220.0K $180.0K
YoY Change 25.0% 22.22% 0.0%
Cash From Operating Activities $2.000M $760.0K $1.010M
YoY Change -42.69% -24.75% -55.7%
INVESTING ACTIVITIES
Capital Expenditures -$300.0K -$180.0K -$50.00K
YoY Change -87.39% 260.0% -44.44%
Acquisitions
YoY Change
Other Investing Activities -$1.520M $8.350M $3.180M
YoY Change -145.65% 162.58% -160.23%
Cash From Investing Activities -$1.810M $8.160M $3.120M
YoY Change -288.54% 161.54% -157.99%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 940.0K -10.76M -4.370M
YoY Change -111.9% 146.22% -326.42%
NET CHANGE
Cash From Operating Activities 2.000M 760.0K 1.010M
Cash From Investing Activities -1.810M 8.160M 3.120M
Cash From Financing Activities 940.0K -10.76M -4.370M
Net Change In Cash 1.130M -1.840M -240.0K
YoY Change -132.75% 666.67% -79.49%
FREE CASH FLOW
Cash From Operating Activities $2.000M $760.0K $1.010M
Capital Expenditures -$300.0K -$180.0K -$50.00K
Free Cash Flow $2.300M $940.0K $1.060M
YoY Change -60.82% -11.32% -55.27%

Facts In Submission

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AvailableForSaleSecuritiesContinuousUnrealizedLossPositionLessThanTwelveMonthsFairValue
72395000
CY2018Q3 us-gaap Available For Sale Securities Continuous Unrealized Loss Position Less Than Twelve Months Fair Value
AvailableForSaleSecuritiesContinuousUnrealizedLossPositionLessThanTwelveMonthsFairValue
30288000
CY2017Q4 us-gaap Available For Sale Securities Continuous Unrealized Loss Position Twelve Months Or Longer Fair Value
AvailableForSaleSecuritiesContinuousUnrealizedLossPositionTwelveMonthsOrLongerFairValue
65975000
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AvailableForSaleSecuritiesContinuousUnrealizedLossPositionTwelveMonthsOrLongerFairValue
105859000
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AvailableForSaleSecuritiesGrossRealizedGainLossNet
510000
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AvailableForSaleSecuritiesGrossRealizedGainLossNet
2000
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AvailableForSaleSecuritiesGrossRealizedGainLossNet
-15000
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AvailableForSaleSecuritiesGrossRealizedGainLossNet
us-gaap Available For Sale Securities Gross Realized Gains
AvailableForSaleSecuritiesGrossRealizedGains
539000
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AvailableForSaleSecuritiesGrossRealizedGains
30000
CY2018Q3 us-gaap Available For Sale Securities Gross Realized Gains
AvailableForSaleSecuritiesGrossRealizedGains
us-gaap Available For Sale Securities Gross Realized Losses
AvailableForSaleSecuritiesGrossRealizedLosses
32000
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AvailableForSaleSecuritiesGrossRealizedLosses
28000
us-gaap Available For Sale Securities Gross Realized Losses
AvailableForSaleSecuritiesGrossRealizedLosses
15000
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AvailableForSaleSecuritiesGrossRealizedLosses
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94
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AvailableforsaleSecuritiesInUnrealizedLossPositionsQualitativeDisclosureNumberOfPositions1
95
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AvailableforsaleSecuritiesInUnrealizedLossPositionsQualitativeDisclosureNumberOfPositionsGreaterThanOrEqualToOneYear
42
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AvailableforsaleSecuritiesInUnrealizedLossPositionsQualitativeDisclosureNumberOfPositionsGreaterThanOrEqualToOneYear
65
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AvailableForSaleSecuritiesInUnrealizedLossPositionsQualitativeDisclosureNumberOfPositionsLessThanOneYear
52
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AvailableForSaleSecuritiesInUnrealizedLossPositionsQualitativeDisclosureNumberOfPositionsLessThanOneYear
30
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14972000
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15862000
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269000
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BankOwnedLifeInsuranceIncome
93000
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BankOwnedLifeInsuranceIncome
266000
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BankOwnedLifeInsuranceIncome
99000
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1.02
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BusinessAcquisitionProFormaEarningsPerShareBasic
0.28
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BusinessAcquisitionProFormaEarningsPerShareBasic
1.01
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BusinessAcquisitionProFormaEarningsPerShareBasic
0.30
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5176000
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BusinessAcquisitionsProFormaNetIncomeLoss
1428000
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BusinessAcquisitionsProFormaNetIncomeLoss
5179000
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BusinessAcquisitionsProFormaNetIncomeLoss
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415000
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us-gaap Cash Acquired From Acquisition
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7561000
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9559000
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CashAndCashEquivalentsAtCarryingValue
13352000
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CashAndCashEquivalentsAtCarryingValue
9897000
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CashAndCashEquivalentsAtCarryingValue
15328000
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CashAndCashEquivalentsPeriodIncreaseDecrease
3793000
us-gaap Cash And Cash Equivalents Period Increase Decrease
CashAndCashEquivalentsPeriodIncreaseDecrease
5431000
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9839000
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CashAndDueFromBanks
14280000
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9897000
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CashCashEquivalentsAndFederalFundsSold
15328000
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0.66
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CommonStockDividendsPerShareCashPaid
0.22
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CommonStockDividendsPerShareCashPaid
0.66
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CommonStockDividendsPerShareCashPaid
0.22
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0.66
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CommonStockDividendsPerShareDeclared
0.66
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CommonStockParOrStatedValuePerShare
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20000000
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CommonStockSharesAuthorized
20000000
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4811611
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CommonStockSharesIssued
5134249
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CommonStockSharesOutstanding
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CommonStockSharesOutstanding
5093536
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CommonStockValue
4811000
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CommonStockValue
5134000
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2669000
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1821000
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-34000
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-113000
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DefinedBenefitPlanContributionsByEmployer
0
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DefinedBenefitPlanContributionsByEmployer
1350000
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DefinedBenefitPlanContributionsByEmployer
1350000
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Deposits
477668000
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Deposits
529787000
us-gaap Depreciation Nonproduction
DepreciationNonproduction
487000
us-gaap Depreciation Nonproduction
DepreciationNonproduction
604000
us-gaap Description Of New Accounting Pronouncements Not Yet Adopted
DescriptionOfNewAccountingPronouncementsNotYetAdopted
<div> <div style="margin-left:0pt;margin-right:0pt;"> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">2. RECENT ACCOUNTING STANDARDS UPDATES (&#x201C;ASU&#x201D;)</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;text-decoration:underline;">Adoption of New Accounting Standards </font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;">ASU 2014-09, Revenue from Contracts with Customers (606)</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">Issued: </font><font style="display: inline;font-family:Times New Roman;">May 2014</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">Summary:</font><font style="display: inline;font-family:Times New Roman;"> The amendments in this Update establish a comprehensive revenue recognition standard for virtually all industries under U.S. GAAP, including those that previously followed industry-specific guidance. The revenue standard&#x2019;s core principle requires an entity to 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. To accomplish this objective, the standard requires five basic steps: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. </font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;">In August 2015, the FASB issued </font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;">ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date</font><font style="display: inline;font-family:Times New Roman;">. ASU 2015-14 deferred the effective date of the new revenue recognition standard by one year. As a result, the standard was effective for public entities in fiscal years beginning after December 15, 2017. </font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;">The Company adopted the ASU 2014-09 on January 1, 2018 and elected the modified retrospective transition method. Because the amended guidance does not apply to revenue associated with financial instruments accounted for under other U.S. GAAP, the Company assessed the effect the guidance had on the recognition processes of certain recurring revenue streams related to non-interest income, in addition to when it is appropriate to recognize a gain/loss on the transfer of nonfinancial assets, such as other real estate owned. The Company did not identify any significant changes in the timing of revenue recognition when considering the amended accounting guidance. Additional disclosures related to revenue recognition appear in Note 13.</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> </p> <p><font size="1"> </font></p> <p style="margin:0pt;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;;font-size: 10pt"><font style="display: inline;font-family:Times New Roman;font-weight:bold;"></font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;">ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income</font><font style="display: inline;font-family:Times New Roman;font-style:italic;font-size:9pt;">. &nbsp;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 9pt"> <font style="display: inline;font-family:Times New Roman;font-size:9pt;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">Issued: </font><font style="display: inline;font-family:Times New Roman;">February 2018</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 9pt"> <font style="display: inline;font-family:Times New Roman;font-size:9pt;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">Summary:</font><font style="display: inline;font-family:Times New Roman;font-size:9pt;"> &nbsp; &nbsp;</font><font style="display: inline;font-family:Times New Roman;">The Update allows entities to reclassify from accumulated other comprehensive income (&#x201C;AOCI&#x201D;) to retained earnings the 'stranded' tax effects of</font><font style="display: inline;font-family:Times New Roman;font-weight:bold;">&nbsp;</font><font style="display: inline;font-family:Times New Roman;">accounting for income tax rate changes on items accounted for in AOCI that were impacted by tax reform enacted in December 2017. Because the impact of tax rate changes is recorded in income, items accounted for in AOCI could be left with a stranded tax effect appearing as though those items do not reflect the appropriate tax rate. The FASB's changes were intended to improve the usefulness of information reported to financial statement users. </font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">Effective Date:</font><font style="display: inline;font-family:Times New Roman;"> &nbsp;The changes are effective for years beginning after December 31, 2018, with early adoption permitted. The Company elected to adopt the changes in the first quarter of 2018, as of December 31, 2017. The amount transferred from AOCI to retained earnings totaled </font><font style="display: inline;font-family:Times New Roman;">$588,000</font><font style="display: inline;font-family:Times New Roman;"> and represented the impact of the Company&#x2019;s corporate tax rate change from </font><font style="display: inline;font-family:Times New Roman;">34%</font><font style="display: inline;font-family:Times New Roman;"> to </font><font style="display: inline;font-family:Times New Roman;">21%</font><font style="display: inline;font-family:Times New Roman;"> at the date of enactment of the tax reform for the unrealized gains and losses on securities and the defined benefit plan accounted for in AOCI.</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;">ASU 2016-01, Measurement of Financial Instruments</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">Issued: </font><font style="display: inline;font-family:Times New Roman;">January 2016</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 9pt"> <font style="display: inline;font-family:TrebuchetMS-Bold;font-weight:bold;font-size:9.5pt;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">Summary:</font><font style="display: inline;font-family:Times New Roman;"> The amendments in this Update require all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those changes accounted for under the equity method of accounting or those that result in consolidation of the investee).&nbsp;The amendments in this Update also require an entity to present separately in AOCI the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the Update emphasizes the existing requirement to use exit prices to measure fair value for disclosure purposes and clarifies that entities should not make use of a practicability exception in determining the fair value of loans.&nbsp;&nbsp;Accordingly, we refined the calculations used to determine the disclosed fair value of our loans as part of adopting this standard. The redefined calculation did not have a significant impact on our fair value disclosures.</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">Effective Date:</font><font style="display: inline;font-family:Times New Roman;"> For public entities, the amendments in the Update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.&nbsp;The Company currently holds a small portfolio of equity investments for which the fair value fluctuates with market activity. The Company adopted ASU 2016-01 on January 1, 2018. As of this date, the Company had </font><font style="display: inline;font-family:Times New Roman;">$197,000</font><font style="display: inline;font-family:Times New Roman;"> in unrealized gains on equity securities (see Note 6). The adoption of this Update resulted in a reclassification of </font><font style="display: inline;font-family:Times New Roman;">$156,000</font><font style="display: inline;font-family:Times New Roman;"> from other comprehensive loss to retained earnings. The Company recorded a decline of </font><font style="display: inline;font-family:Times New Roman;">$4,000</font><font style="display: inline;font-family:Times New Roman;"> during the three months ended September 30, 2018 and an increase of </font><font style="display: inline;font-family:Times New Roman;">$42,000</font><font style="display: inline;font-family:Times New Roman;"> during the nine months ended September 30, 2018 for the change in fair value of equity securities on the consolidated statements of income.</font> </p> <p style="margin:0pt;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;">ASU 2018-03, Technical Corrections and Improvements to Financial Instruments &#x2013; Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities</font> </p> <p style="margin:0pt;line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">Issued:</font><font style="display: inline;font-family:Times New Roman;"> February 2018</font> </p> <p style="margin:0pt;line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">Summary:</font><font style="display: inline;font-family:Times New Roman;"> The FASB issued this Update to clarify certain aspects of the guidance on recognizing and measuring financial assets and liabilities in ASU 2016-01:</font> </p> <p style="margin:0pt;line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;">&#xFEFF;</font> </p> <div style="width:100%"><table style="width:100%; table-layout: fixed;" cellpadding="0" cellspacing="0"><tr><td style="width:18pt;"><p style="width:18pt;font-size:0pt;"></p></td><td valign="top" align="left" style="width: 18.00pt;"> <p style="line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt 0pt 8pt;"> <font style="margin:0pt 0pt 8pt;font-family:Symbol;line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-size:10pt;;"> &#xB7;</font> </p> </td><td style="width:0pt;"><p style="width:0pt;width:0pt;font-size:0pt;"></p></td><td align="left" valign="top"> <p style="line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt 0pt 8pt;"> <font style="display: inline;font-family:Times New Roman;color:#000000;">Clarification regarding the ability to discontinue application of the measurement alternative for equity securities without a readily determinable fair value;</font></p></td></tr></table></div> <div style="width:100%"><table style="width:100%; table-layout: fixed;" cellpadding="0" cellspacing="0"><tr><td style="width:18pt;"><p style="width:18pt;font-size:0pt;"></p></td><td valign="top" align="left" style="width: 18.00pt;"> <p style="line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt 0pt 8pt;"> <font style="margin:0pt 0pt 8pt;font-family:Symbol;line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-size:10pt;;"> &#xB7;</font> </p> </td><td style="width:0pt;"><p style="width:0pt;width:0pt;font-size:0pt;"></p></td><td align="left" valign="top"> <p style="line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt 0pt 8pt;"> <font style="display: inline;font-family:Times New Roman;color:#000000;">Clarification of the measurement date for fair value adjustments to the carrying amount of equity securities without a readily determinable fair value for which the measurement alternative is elected;</font></p></td></tr></table></div> <div style="width:100%"><table style="width:100%; table-layout: fixed;" cellpadding="0" cellspacing="0"><tr><td style="width:18pt;"><p style="width:18pt;font-size:0pt;"></p></td><td valign="top" align="left" style="width: 18.00pt;"> <p style="line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt 0pt 8pt;"> <font style="margin:0pt 0pt 8pt;font-family:Symbol;line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-size:10pt;;"> &#xB7;</font> </p> </td><td style="width:0pt;"><p style="width:0pt;width:0pt;font-size:0pt;"></p></td><td align="left" valign="top"> <p style="line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt 0pt 8pt;"> <font style="display: inline;font-family:Times New Roman;color:#000000;">Clarification of the unit of account for fair value adjustments to forward contracts and purchased options on equity securities without a readily determinable fair value for which the measurement alternative is expected to be elected;</font></p></td></tr></table></div> <div style="width:100%"><table style="width:100%; table-layout: fixed;" cellpadding="0" cellspacing="0"><tr><td style="width:18pt;"><p style="width:18pt;font-size:0pt;"></p></td><td valign="top" align="left" style="width: 18.00pt;"> <p style="line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt 0pt 8pt;"> <font style="margin:0pt 0pt 8pt;font-family:Symbol;line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-size:10pt;;"> &#xB7;</font> </p> </td><td style="width:0pt;"><p style="width:0pt;width:0pt;font-size:0pt;"></p></td><td align="left" valign="top"> <p style="line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt 0pt 8pt;"> <font style="display: inline;font-family:Times New Roman;color:#000000;">Presentation requirements for certain hybrid financial liabilities for which the fair value option is elected;</font></p></td></tr></table></div> <div style="width:100%"><table style="width:100%; table-layout: fixed;" cellpadding="0" cellspacing="0"><tr><td style="width:18pt;"><p style="width:18pt;font-size:0pt;"></p></td><td valign="top" align="left" style="width: 18.00pt;"> <p style="line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt 0pt 8pt;"> <font style="margin:0pt 0pt 8pt;font-family:Symbol;line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-size:10pt;;"> &#xB7;</font> </p> </td><td style="width:0pt;"><p style="width:0pt;width:0pt;font-size:0pt;"></p></td><td align="left" valign="top"> <p style="line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt 0pt 8pt;"> <font style="display: inline;font-family:Times New Roman;color:#000000;">Measurement of financial liabilities denominated in a foreign currency for which the fair value option is elected; and</font></p></td></tr></table></div> <div style="width:100%"><table style="width:100%; table-layout: fixed;" cellpadding="0" cellspacing="0"><tr><td style="width:18pt;"><p style="width:18pt;font-size:0pt;"></p></td><td valign="top" align="left" style="width: 18.00pt;"> <p style="line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt 0pt 8pt;"> <font style="margin:0pt 0pt 8pt;font-family:Symbol;line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-size:10pt;;"> &#xB7;</font> </p> </td><td style="width:0pt;"><p style="width:0pt;width:0pt;font-size:0pt;"></p></td><td align="left" valign="top"> <p style="line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt 0pt 8pt;"> <font style="display: inline;font-family:Times New Roman;color:#000000;">Transition guidance for equity securities without a readily determinable fair value.</font></p></td></tr></table></div> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:105.83%;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;">The amendments in ASU 2018-03 are effective for public business entities for fiscal years beginning after December 15, 2017 and for interim periods within those fiscal years beginning after June 15, 2018. For all other entities, the effective date is the same as the effective date for ASU 2016-01. All entities may early adopt the amendments, including adoption in an interim period, provided they have already adopted ASU 2016-01. The Company adopted this Update in conjunction with the adoption of ASU 2016-01 on January 1, 2018. The adoption had </font><font style="display: inline;font-family:Times New Roman;color:#000000;">no material impact to the Company&#x2019;s consolidated financial position or results of operations.</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;color:#000000;">ASU 2017-09, Scope of Modification Accounting</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">Issued: </font><font style="display: inline;font-family:Times New Roman;color:#000000;">May 2017</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">Summary: </font><font style="display: inline;font-family:Times New Roman;color:#000000;">ASU 2017-09 clarifies Topic 718 such that an entity must apply modification accounting to changes in the terms or conditions of a share-based payment award unless all of the following criteria are met:</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;">&#xFEFF;</font> </p> <div style="width:100%"><table style="width:100%; table-layout: fixed;" cellpadding="0" cellspacing="0"><tr><td style="width:18pt;"><p style="width:18pt;font-size:0pt;"></p></td><td valign="top" align="left" style="width: 18.00pt;"> <p style="text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt;"> <font style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size:10pt;;"> 1.</font> </p> </td><td style="width:0pt;"><p style="width:0pt;width:0pt;font-size:0pt;"></p></td><td align="left" valign="top"> <p style="text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt;"> <font style="display: inline;font-family:Times New Roman;color:#000000;">The fair value of the modified award is the same as the fair value of the original award immediately before the modification.&nbsp;&nbsp;The standard indicates that if the modification does not affect any of the inputs to the valuation technique used to value the award, the entity is not required to estimate the value immediately before and after the modification.</font></p></td></tr></table></div> <div style="width:100%"><table style="width:100%; table-layout: fixed;" cellpadding="0" cellspacing="0"><tr><td style="width:18pt;"><p style="width:18pt;font-size:0pt;"></p></td><td valign="top" align="left" style="width: 18.00pt;"> <p style="text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt;"> <font style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size:10pt;;"> 2.</font> </p> </td><td style="width:0pt;"><p style="width:0pt;width:0pt;font-size:0pt;"></p></td><td align="left" valign="top"> <p style="text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt;"> <font style="display: inline;font-family:Times New Roman;color:#000000;">The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the modification.</font></p></td></tr></table></div> <div style="width:100%"><table style="width:100%; table-layout: fixed;" cellpadding="0" cellspacing="0"><tr><td style="width:18pt;"><p style="width:18pt;font-size:0pt;"></p></td><td valign="top" align="left" style="width: 18.00pt;"> <p style="text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt;"> <font style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size:10pt;;"> 3.</font> </p> </td><td style="width:0pt;"><p style="width:0pt;width:0pt;font-size:0pt;"></p></td><td align="left" valign="top"> <p style="text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt;"> <font style="display: inline;font-family:Times New Roman;color:#000000;">The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the modification. </font></p></td></tr></table></div> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 9pt"> <font style="display: inline;font-family:Times New Roman;font-size:9.5pt;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">Effective Date: </font><font style="display: inline;font-family:Times New Roman;color:#000000;">The amendments were effective for all entities for fiscal years beginning after December 15, 2017, including interim periods within those years. The Company adopted ASU 2017-09 on January 1, 2018 and it had no material impact on the Company&#x2019;s consolidated financial position or results of operations.</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;color:#000000;">ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">Issued: </font><font style="display: inline;font-family:Times New Roman;color:#000000;">March 2017</font> </p> <p style="margin:0pt;line-height:115%;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;line-height:115%;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">Summary: </font><font style="display: inline;font-family:Times New Roman;color:#000000;">ASU 2017-08 shortens the amortization period for premiums on purchased callable debt securities to the earliest call date, rather than amortizing over the full contractual term. The ASU does not change the accounting for securities held at a discount.</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">Effective Date: </font><font style="display: inline;font-family:Times New Roman;color:#000000;">The amendments are effective for public business entities for fiscal years beginning after December 15, 2018. Early adoption is permitted. The Company chose to early adopt this standard, and the financial statements as of, and for the year ended, December 31, 2017 reflected the impact of premium amortization on callable debt securities to the earliest call date. The adoption of this ASU did not have a material impact on the Company&#x2019;s consolidated financial statements.</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;color:#000000;">ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">Issued: March 2017</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">Summary: </font><font style="display: inline;font-family:Times New Roman;color:#000000;">ASU 2017-07 requires that an employer disaggregate the service cost component from the other components of net benefit cost.</font><font style="display: inline;font-family:inherit;color:#000000;">&nbsp;</font><font style="display: inline;font-family:Times New Roman;color:#000000;">The amendments also provide explicit guidance on how to present the service cost component and the other components of net benefit cost in the income statement and allows only the service cost component of net benefit cost to be eligible for capitalization.</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">Effective Date: </font><font style="display: inline;font-family:Times New Roman;color:#000000;">The amendments were effective for public business entities for fiscal years beginning after December 15, 2017. The Company adopted this Update on January 1, 2018, and it had no impact on the Company&#x2019;s consolidated financial position and results of operations because the Company&#x2019;s defined benefit plan is frozen; therefore, there is no service cost component to consider. The cost for other components related to the defined benefit plan are recorded in employee benefits expense on the consolidated statements of income.</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> </p> <p><font size="1"> </font></p> <p style="margin:0pt;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;;font-size: 10pt"><font style="display: inline;font-family:Times New Roman;font-weight:bold;"></font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;">ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments</font> </p> <p style="margin:16pt 0pt 12pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">Issued: </font><font style="display: inline;font-family:Times New Roman;">August 2016</font> </p> <p style="margin:0pt 0pt 12pt;line-height:115%;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">Summary: </font><font style="display: inline;font-family:Times New Roman;">ASU 2016-15 clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments are intended to reduce diversity in practice.</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">Effective Date: </font><font style="display: inline;font-family:Times New Roman;">The amendments were effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company adopted this Update on January 1, 2018 and it did not have a material impact on the Company&#x2019;s consolidated financial position or results of operations.</font> </p> <p style="margin:0pt;text-align:left;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;">ASU 2018-09, Codification Improvements</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">Issued: </font><font style="display: inline;font-family:Times New Roman;">July 2018</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">Summary: </font><font style="display: inline;font-family:Times New Roman;">ASU 2018-09 amendments represent changes to clarify, correct errors in, or make minor improvements to the Codification. The amendments make the Codification easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. The amendments are not expected to have a notable effect on current accounting practice or create a significant administrative cost to most entities.</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">Effective Date: </font><font style="display: inline;font-family:Times New Roman;">The transition and effective date guidance is based on the facts and circumstances of each amendment. Some of the amendments do not require transition guidance and will be effective upon issuance. However, many of the amendments do have transition guidance with effective dates for annual periods beginning after December 15, 2017, for public business entities. </font><font style="display: inline;font-family:Times New Roman;">This Update did not have an impact on the Company&#x2019;s consolidated financial position or results of operations in regards to amended improvements to recently adopted standards and is not expected to have an impact upon the adoption of amended guidance not yet effective.</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;text-decoration:underline;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;text-decoration:underline;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;text-decoration:underline;">Newly Issued, Not Yet Effective Standards</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;">ASU 2018-14, Compensation&#x2014;Retirement Benefits&#x2014;Defined Benefit Plans&#x2014;General (Topic 715-20): Disclosure Framework&#x2014;Changes to the Disclosure Requirements for Defined Benefit Plans</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">Issued: </font><font style="display: inline;font-family:Times New Roman;">August 2018</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">Summary: </font><font style="display: inline;font-family:Times New Roman;">ASU 2018-14 modifies the disclosure requirements under ASC 715-20 for employers that sponsor defined benefit pension or other postretirement plans. Those modifications include the removal and addition of disclosure requirements as well as clarifying specific disclosure requirements.</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">Effective Date: </font><font style="display: inline;font-family:Times New Roman;">The amendments are effective for public business entities for fiscal years ending after December 15, 2020. For all other entities, the amendments are effective for annual reporting periods ending after December 15, 2021. Early adoption is permitted. This Update will have no impact on the Company&#x2019;s consolidated financial position and results of operations because in August 2018, Juniata&#x2019;s Board of Directors resolved to terminate the Company&#x2019;s </font><font style="display: inline;font-family:Times New Roman;">defined benefit retirement plan, The Juniata Valley Bank Retirement Plan</font><font style="display: inline;font-family:Times New Roman;">, effective November 30, 2018. All participants have been properly notified and settlement of all obligations is expected to occur in mid-2019. See Note 11 for additional information. </font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;">ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework&#x2014;Changes to the Disclosure Requirements for Fair Value Measurement</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">Issued: </font><font style="display: inline;font-family:Times New Roman;">August 2018</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">Summary: </font><font style="display: inline;font-family:Times New Roman;">ASU 2018-13 modifies the disclosure requirements for fair value measurements required under ASC 820. Those modifications include the removal and addition of disclosure requirements as well as clarifying specific disclosure requirements.</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">Effective Date: </font><font style="display: inline;font-family:Times New Roman;">The amendments become effective for all entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted upon issuance of this ASU. An entity is permitted to early adopt all disclosure requirements in the ASU or early adopt only the removed and modified disclosures and delay adoption of the additional disclosures until their effective date. This Update is not expected to have an impact on the Company&#x2019;s consolidated financial position or results of operations.</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;">ASU 2016-02, Leases</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">Issued: </font><font style="display: inline;font-family:Times New Roman;">February 2016</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 9pt"> <font style="display: inline;font-family:TrebuchetMS-Bold;font-weight:bold;font-size:9.5pt;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;">Summary: </font><font style="display: inline;font-family:Times New Roman;">The new standard establishes a right-of-use (&#x201C;ROU&#x201D;) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement.</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;">In July 2018, the FASB issued </font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;">ASU-2018-10, Codification Improvements to Topic 842, Leases</font><font style="display: inline;font-family:Times New Roman;">. ASU 2018-10 clarifies the intended application of certain narrow aspects of the guidance in ASU 2016-02. The amendments are similar in nature to those in the FASB&#x2019;s ongoing project to make improvements to clarify the Codification or correct unintended application of the guidance. Key amendments in this ASU include:</font> </p> <div style="width:100%"><table style="width:100%; table-layout: fixed;" cellpadding="0" cellspacing="0"><tr><td style="width:18pt;"><p style="width:18pt;font-size:0pt;"></p></td><td valign="top" align="left" style="width: 18.00pt;"> <p style="text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt;"> <font style="margin:0pt;font-family:Symbol;text-align:justify;text-justify:inter-ideograph;font-size:10pt;;"> &#xB7;</font> </p> </td><td style="width:0pt;"><p style="width:0pt;width:0pt;font-size:0pt;"></p></td><td align="left" valign="top"> <p style="text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt;"> <font style="display: inline;font-family:Times New Roman;color:#000000;">Updating the definition of Rate Implicit in the Lease to clarify that the rate cannot be less than zero;</font></p></td></tr></table></div> <div style="width:100%"><table style="width:100%; table-layout: fixed;" cellpadding="0" cellspacing="0"><tr><td style="width:18pt;"><p style="width:18pt;font-size:0pt;"></p></td><td valign="top" align="left" style="width: 18.00pt;"> <p style="text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt;"> <font style="margin:0pt;font-family:Symbol;text-align:justify;text-justify:inter-ideograph;font-size:10pt;;"> &#xB7;</font> </p> </td><td style="width:0pt;"><p style="width:0pt;width:0pt;font-size:0pt;"></p></td><td align="left" valign="top"> <p style="text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt;"> <font style="display: inline;font-family:Times New Roman;color:#000000;">Clarifying application of guidance for lessors when determining impairment of net investment in the lease;</font></p></td></tr></table></div> <div style="width:100%"><table style="width:100%; table-layout: fixed;" cellpadding="0" cellspacing="0"><tr><td style="width:18pt;"><p style="width:18pt;font-size:0pt;"></p></td><td valign="top" align="left" style="width: 18.00pt;"> <p style="text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt;"> <font style="margin:0pt;font-family:Symbol;text-align:justify;text-justify:inter-ideograph;font-size:10pt;;"> &#xB7;</font> </p> </td><td style="width:0pt;"><p style="width:0pt;width:0pt;font-size:0pt;"></p></td><td align="left" valign="top"> <p style="text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt;"> <font style="display: inline;font-family:Times New Roman;color:#000000;">Clarifying whether lessors and lessees should recognize certain transition adjustments to earnings rather than through equity;</font></p></td></tr></table></div> <div style="width:100%"><table style="width:100%; table-layout: fixed;" cellpadding="0" cellspacing="0"><tr><td style="width:18pt;"><p style="width:18pt;font-size:0pt;"></p></td><td valign="top" align="left" style="width: 18.00pt;"> <p style="text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt;"> <font style="margin:0pt;font-family:Symbol;text-align:justify;text-justify:inter-ideograph;font-size:10pt;;"> &#xB7;</font> </p> </td><td style="width:0pt;"><p style="width:0pt;width:0pt;font-size:0pt;"></p></td><td align="left" valign="top"> <p style="text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt;margin:0pt;"> <font style="display: inline;font-family:Times New Roman;color:#000000;">Clarifying certain transition guidance for amounts previously recognized in business combinations.</font></p></td></tr></table></div> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;">In July 2018, the FASB also issued </font><font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;color:#000000;">ASU 2018-11, Leases (Topic 842): Targeted Improvements</font><font style="display: inline;font-family:Times New Roman;color:#000000;">. ASU 2018-11 provides entities with an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;">ASU 2018-11 also provides lessors with a practical expedient, by class of underlying asset, to elect not to separate nonlease components from the associated lease component and, instead, to account for those components as a single component if the nonlease components otherwise would be accounted for under the new revenue guidance (Topic 606) and both the timing and pattern of transfer of the nonlease component(s) and associated lease component are the same, and the lease component, if accounted for separately, would be classified as an operating lease. If the nonlease component or components associated with the lease component are the predominant component of the combined component, an entity is required to account for the combined component in accordance with Topic 606. Otherwise, the entity must account for the combined component as an operating lease in accordance with Topic 842. </font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">Effective Date:</font><font style="display: inline;font-family:Times New Roman;color:#000000;">&nbsp;</font><font style="display: inline;font-family:Times New Roman;color:#000000;">ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. ASU 2018-10 becomes effective upon issuance for entities that early adopted Topic 842, and the transition requirements are the same as those in Topic 842. For entities that have not adopted Topic 842, the effective date and transition requirements are the same as the effective date and transition requirements in Topic 842. The effective date of the amendments in ASU 2018-11 related to the lessor practical expedient depends upon whether an entity has adopted the new leases standard as of the date of application of this ASU. The effective date of the amendments in ASU 2018-11 related to transition are the same as the effective date for ASU 2016-02. </font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;">The Company has determined that the provisions of ASU 2016-02 will result in an increase in assets to recognize the present value of the lease obligations with a corresponding increase in liabilities; however, the Company does not expect this new standard to have a material impact on the Company&#x2019;s results of operations or cash flows because the Company owns most of its facilities and this ASU will apply primarily to its four small operating leases. The Company is currently evaluating the appropriate transition method and projected present value of its leases at the adoption date.</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;color:#000000;">ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">Issued: </font><font style="display: inline;font-family:Times New Roman;color:#000000;">August 2017</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">Summary: </font><font style="display: inline;font-family:Times New Roman;color:#000000;">ASU 2017-12 improves Topic 815</font><font style="display: inline;font-family:Times New Roman;color:#000000;font-size:5pt;vertical-align:super;line-height:100%">&nbsp;</font><font style="display: inline;font-family:Times New Roman;color:#000000;">by simplifying and expanding the eligible hedging strategies for financial and nonfinancial risks by more closely aligning hedge accounting with a company&#x2019;s risk management activities, and also simplifies its application 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 new standard 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.</font><font style="display: inline;font-family:Times New Roman;color:#000000;">&nbsp;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">Effective Date: </font><font style="display: inline;font-family:Times New Roman;color:#000000;">The amendments are effective for public business entities, for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early application is permitted in any interim period after issuance of the amendments for existing hedging relationships on the date of adoption.</font><font style="display: inline;font-family:Times New Roman;color:#000000;">&nbsp;</font><font style="display: inline;font-family:Times New Roman;color:#000000;">This Update will have no impact on the Company&#x2019;s consolidated financial position and results of operations.</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;color:#000000;">ASU 2017-04, Simplifying the Test for Goodwill Impairment</font> </p> <p style="margin:16pt 0pt 12pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">Issued: </font><font style="display: inline;font-family:Times New Roman;color:#000000;">January 2017</font> </p> <p style="margin:0pt 0pt 12pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">Summary: </font><font style="display: inline;font-family:Times New Roman;color:#000000;">ASU 2017-04 eliminates the requirement of Step 2 in the current guidance to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit&#x2019;s carrying amount over its fair value in Step 1 of the current guidance.</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">Effective Date: </font><font style="display: inline;font-family:Times New Roman;color:#000000;">The amendments are effective for public business entities for fiscal years beginning after December 15, 2019. The adoption of this Update is not expected to have an impact on the Company&#x2019;s consolidated financial position and results of operations.</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;color:#000000;">ASU 2016-13, Financial Instruments &#x2013; Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">Issued: </font><font style="display: inline;font-family:Times New Roman;color:#000000;">June 2016</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 9pt"> <font style="display: inline;font-family:TrebuchetMS-Bold;font-weight:bold;font-size:9.5pt;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">Summary: </font><font style="display: inline;font-family:Times New Roman;color:#000000;">ASU 2016-13 requires credit losses on most financial assets to be measured at amortized cost and certain other instruments to be measured using an expected credit loss model (referred to as the current expected credit loss (&#x201C;CECL&#x201D;) model). Under this model, entities will estimate credit losses over the entire contractual term of the instrument (considering estimated prepayments, but not expected extensions or modifications unless reasonable expectation of a troubled debt restructuring exists) from the date of initial recognition of that instrument. </font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;">The ASU also replaces the current accounting model for purchased credit impaired loans and debt securities. The allowance for credit losses for purchased financial assets with a more-than insignificant amount of credit deterioration since origination (&#x201C;PCD assets&#x201D;), should be determined in a similar manner to other financial assets measured on an amortized cost basis. However, upon initial recognition, the allowance for credit losses is added to the purchase price (&#x201C;gross up approach&#x201D;) to determine the initial amortized cost basis. The subsequent accounting for PCD financial assets is the same expected loss model described above.</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;">Further, the ASU made certain targeted amendments to the existing impairment model for available-for-sale (AFS) debt securities. For an AFS debt security for which there is neither the intent nor a more-likely-than-not requirement to sell, an entity will record credit losses as an allowance rather than a write-down of the amortized cost basis.</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;">&#xFEFF;</font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;font-weight:bold;color:#000000;">Effective Date:</font><font style="display: inline;font-family:Times New Roman;color:#000000;">&nbsp;</font><font style="display: inline;font-family:Times New Roman;color:#000000;">The new standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.</font><font style="display: inline;font-family:Times New Roman;color:#000000;">&nbsp;While the Company&#x2019;s senior management is currently in the process of evaluating the impact of the amended guidance on its consolidated financial statements and disclosures, it currently expects the ALLL to increase upon adoption given that the allowance will be required to cover the full remaining expected life of the portfolio, rather than the incurred loss under current U.S. GAAP. The extent of this increase is still being evaluated and will depend on economic conditions and the composition of the Company&#x2019;s loan portfolio at the time of adoption. In preparation, the Company has partnered with a software provider specializing in ALLL analysis and is assessing the sufficiency of data currently available through its core database. </font> </p> <p style="margin:0pt;text-align:justify;text-justify:inter-ideograph;font-family:Helvetica;font-size: 10pt"> <font style="display: inline;font-family:Times New Roman;color:#000000;">&#xFEFF;</font> </p> <p><font size="1"> </font></p> </div> </div>
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